816 Phil.
776 months from full payment; that the agreed lawyer's fee for the
EN BANC
[ A.C. No. 11149 (Formerly CBD Case No. 13-
3709), August 15, 2017 ]
LAURENCE D. PUNLA AND MARILYN SANTOS,
COMPLAINANTS, VS. ATTY. ELEONOR MARAVILLA-ONA,
RESPONDENT.
DECISION
PER CURIAM:  September 2012 or about 6 months from their last payment in
The present administrative case stemmed from a Complaint-
Affidavit[1] filed with the Integrated Bar of the Philippines
Commission on Bar Discipline (IBP-CBD) by complainants
Laurence D. Punla and Marilyn Santos against respondent Atty.
Eleonor Maravilla-Ona, charging the latter with violation of the
lawyer's oath, for neglecting her clients' interests.
Factual Background
The facts, as culled from the disbarment complaint, are
summarized in the Report and Recommendation[2] of
Investigating Commissioner Ricardo M. Espina viz.:
In a complaint-affidavit filed on 15 January 2013, complainants
alleged that they got to know respondent lawyer sometime in
January 2012 when they requested her to notarize a Deed of
Sale; that subsequently, they broached the idea to respondent
that they intend (sic) to file two (2) annulment cases and they
wanted respondent to represent them; that respondent
committed to finish the two (2) annulment cases within six (6)
two annulment cases is P350,000.00; that the P350,000.00 was
paid in full by complainants, as follows: P100,000.00 on 27
January 2012 as evidenced by respondent's Official Receipt
(O.R.) No. 55749 of even date (Annex "A"); P150,000.00 on 28
January 2012 as evidenced by respondent's Official Receipt
(O.R.) No. 56509 of even date (Annex "B"); P50,000.00 on 14
March 2012 personally handed to respondent lawyer and
evidenced by respondent's handwritten acknowledgement
receipt of same date (Annex "C"); and, P50,000.00 on 15 March
2012 deposited to respondent's Metrobank account no. 495-3-
49509141-5 (Annex "D").
On the commitment of respondent that she will (sic) finish the
cases in six (6) months, complainants followed up their cases in
March 2012. They were ignored by respondent. On 25
September 2012, complainants sent a letter (Annex "E") to
respondent demanding that the P350,000.00 they paid her be
refunded in full within five (5) days from receipt of the letter. In
a Certification dated 07 November 2012 (Annex "F"), the
Philpost of Dasmariñas, Cavite, attested that complainants'
letter was received by respondent on 01 October 2012. No
refund was made by respondent.[3]
In an Order[4] dated January 25, 2013, the IBP directed
respondent to file her Answer within 15 days. No answer was
filed. A Mandatory Conference/Hearing was set on December 4,
2013[5] but respondent did not appear, so it was reset to
January 22, 2014.[6] However, respondent again failed to
attend the mandatory conference/hearing as scheduled.
Hence, in an Order[7] dated January 22, 2014, the mandatory
conference was terminated and both parties were directed to
submit their verified position papers.
Report and Recommendation of the Investigating
Commissioner
 5. Mercedes A.C. No.
The Investigating Commissioner was of the opinion that Bayan 6460
respondent is guilty of violating Canons 17 and 18 of the Code 6. Rustica A.C. No.
of Professional Responsibility, to wit:[8] Canuel 6462
There is clear violation of Canons 17 and 18, Canons of 7. Anita Canuel A.C. No.
Professional Responsibility. These canons, quoted hereunder, 8. Elmer Canuel 6457
[state]: 9. Evangeline A.C. No.
CANON 17 - A lawyer owes fidelity to the cause of his client and Sangalang 6463
he shall be mindful of the trust and confidence reposed in him. 10. Felisa A.C. No.
Amistoso 6464
CANON 18 - A lawyer shall serve his client with competence and A.C. No.
diligence. 6469
Of particular concern is Rule 18.04, Canon 18 of the Code of
CBD Case
Professional Responsibility, which requires a lawyer to always 11. Beatrice Pending with July 26,
No. 10- Suspension
keep the client informed of the developments in his case and to Yatoo, et al. Supreme Court 2010
2733
respond whenever the client requests for information.
Respondent has miserably failed to comply with this Canon.[9] CBD Case
12. Norma For report and May 23,
In addition, the IBP Investigating Commissioner found that No. 12-
Guiterrez recommendation 2012
respondent has been charged with several infractions. Thus: 3444
Moreover, verification conducted by this Office shows that this CBD Case August
13. Bienvenida For report and
is not the first time that respondent lawyer has been No. 12- 01,
Flor Suarez recommendation
3534 2012
administratively charged before this Office. As shown in the
table below, respondent is involved in the following active cases:
Clearly, respondent lawyer has been a serial violator of the
Canons of Professional Responsibility as shown in the thirteen
CASE WHEN (13) pending cases filed against her. Add to that the present
COMPLAINANTS STATUS PENALTY
NO. FILED case and that places the total pending administrative cases
Ten (10) against respondent at fourteen (14). That these 14 cases were
consolidated A.C. No. Pending with Suspension filed on different dates and by various individuals is substantial
cases: 6369 Supreme Court proof that respondent has the propensity to violate her lawyer's
1. Felisa A.C. No. oath - and has not changed in her professional dealing with the
Amistoso, et al. 6371 public.[10]
2. Anita Lagman A.C. No. Consequently, the Investigating Commissioner recommended
3. Isidro H. 6458 that respondent be disbarred and ordered to pay complainants
Montoya A.C. No. the amount of P350,000.00 with legal interest until fully paid. [11]
4. Noel Angcao 6459
Recommendation of the IBP Board of Governors
The IBP Board of Governors, in Resolution No. XXI-2015-
156[12] dated February 20, 2015, resolved to adopt the findings
of the Investigating Commissioner as well as the recommended
penalty of disbarment.
The issue in this case is whether respondent should be
disbarred.
Our Ruling
The Court resolves to adopt the findings of fact of the IBP but
must, however, modify the penalty imposed in view of
respondent's previous disbarment.
Rule 138, Sec. 27 of the Rules of Court provides the penalties of
disbarment and suspension as follows:
Disbarment or suspension of attorneys by Supreme Court;
grounds therefor. — A member of the bar may be disbarred or
suspended from his office as attorney by the Supreme Court for
any deceit, malpractice, or other gross misconduct in such
office, grossly immoral conduct, or by reason of his conviction of
a crime involving moral turpitude, or for any violation of the
oath which he is required to take before admission to practice,
or for a wilful disobedience of any lawful order of a superior
court, or for corruptly or wilfully appearing as an attorney for a
party to a case without authority so to do x x x.
Here, there is no question as to respondent's guilt. It is clear
from the records thatrespondentviolatedher lawyer's oath and
codeofconduct when she withheld from complainants the
amount of P350,000.00 given to her, despite her failure to
render the necessary legal services, and after complainants
demanded its return.
It cannot be stressed enough that once a lawyer takes up the
cause of a client, that lawyer is duty-bound to serve the latter
with competence and zeal, especially when he/she accepts it for
a fee. The lawyer owes fidelity to such cause and must always
be mindful of the trust and confidence reposed upon him/her.
[13]
 Moreover, a lawyer's failure to return upon demand the
monies he/she holds for his/her client gives rise to the
presumption that he/she has appropriated the said monies for
his/her own use, to the prejudice and in violation of the trust
reposed in him/her by his/her client.[14]
What is more, this Court cannot overlook the reality that several
cases had been filed against respondent, as pointed out by the
IBP. In fact, one such case eventually led to the disbarment of
respondent. In Suarez v. Maravilla-Ona,[15] the Court meted out
the ultimate penalty of disbarment and held that the
misconduct of respondent was aggravated by her unjustified
refusal to obey the orders of the IBP directing her to file an
answer and to appear at the scheduled mandatory conference.
This constitutes blatant disrespect towards the IBP and
amounts to conduct unbecoming a lawyer.
In the same case, the Court took note of the past disbarment
complaints that had been filed against Atty. Maravilla-Ona viz.:
x x x In A.C. No. 10107 entitled Beatrice C. Yatco, represented
by her Attorney-In-Fact, Marivic Yatco v. Atty. Eleanor Maravilla-
Ona, the complainant filed a disbarment case against Atty.
Maravilla-Ona for issuing several worthless checks as rental
payments for the complainant's property and for refusing to
vacate the said property, thus forcing the latter to file an
ejectment case against Atty. Maravilla-Ona. The IBP required
Atty. Maravilla-Ona to file her Answer, but she failed to do so.
Neither did she make an appearance during the scheduled
mandatory conference. In its Resolution dated February 13,
2013, the IBP found Atty. Maravilla-Ona guilty of serious
misconducty and for violating Canon 1, Rule 1.01 of the Code.
The Court later adopted and approved the IBP's findings in its
Resolution of September 15, 2014, and suspended Atty.
Maravilla-Ona from the practice of law for a period of one year.
In yet another disbarment case against Atty. Maravilla-Ona,
docketed as A.C. No. 10944[,] and entitled Norma M. Gutierrez
v. Atty. Eleonor Maravilla-Ona, the complainant therein alleged
that she engaged the services of Atty. Maravilla-Ona and gave
her the amount of P80,000.00 for the filing of a case in court.
However, Atty. Maravilla-Ona failed to file the case, prompting
the complainant to withdraw from the engagement and to
demand the return of the amount she paid. Atty. Maravilla-Ona
returned P15,000.00[,] and executed a promissory note to pay
the remaining P65,000.00. However, despite several demands,
Atty. Maravilla-Ona failed to refund completely the
complainant's money. Thus, a complaint for disbarment was
filed against Atty. Maravilla-Ona for grave misconduct, gross
negligence and incompetence. But again, Atty. Maravilla-Ona
failed to file her Answer and [to] appear in the mandatory
conference before the IBP. The IBP found that Atty. Maravilla-
Ona violated Canon 16, Rule 16.03 of the Code [of Professional
Responsibility] and recommended her suspension for a period of
five (5) years, considering her previous infractions. The Court,
however, reduced Atty. Maravilla-Ona's penalty to suspension
from the practice of law for a period of three (3) years, with a
warning that a repetition of the same or similar offense will be
dealt with more severely. She was also ordered to return the
complainant's money.
Clearly, Atty. Maravilla-Ona exhibits the habit of violating her
oath as a lawyer and the Code [of Professional Responsibility],
as well as defying the processes of the IBP. The Court cannot
allow her blatant disregard of the Code [of Professional
Responsibility] and her sworn duty as a member of the Bar to
continue. She had been warned that a similar violation [would]
merit a more severe penalty, and yet, her reprehensible conduct
has, again, brought embarrassment and dishonor to the legal
profession.[16]
Back to the case at bar: While indeed respondent's
condemnable acts ought to merit the penalty of disbarment, we
cannot disbar her anew, for in this jurisdiction we do not
impose double disbarment.
WHEREFORE, the Court hereby ADOPTS the findings of the
Integrated Bar of the Philippines and FINDS respondent ATTY.
ELEONOR MARAVILLA-ONA GUILTY of gross and continuing
violation of the Code of Professional Responsibility and
accordingly FINEDP40,000.00. Respondent is also ORDERED
to PAY complainants the amount of P350,000.00, with 12%
interest from the date of demand until June 30, 2013 and
6% per annum from July 1, 2013 until full payment.[17] This is
without prejudice to the complainants' filing of the appropriate
criminal case, if they so desire.
Furnish a copy of this Decision to the Office of the Bar
Confidant, which shall append the same to the personal record
of respondent; to the Integrated Bar of the Philippines; and the
Office of the Court Administrator, which shall circulate the
same to all courts in the country for their information and
guidance.
This Decision shall be immediately executory.
SO ORDERED.
Sereno, C. J., Carpio, Velasco, Jr., Leonardo-De Castro, Peralta,
Bersamin, Del Castillo, Perlas-Bernabe, Jardeleza, Martires,
Tijam, Reyes, Jr., and Gesmundo, JJ., concur.
Leonen, J., See Separate Opinion.
Caguioa, J., on official leave.
 [8]
 Id. at 23.
NOTICE OF JUDGMENT
[9]
 Id. at 23-24.
Sirs/Mesdames:
[10]
 Id. at 22-23.
Please take notice that on August 15,
2017 a Decision/Resolution, copy attached herewith, was [11]
 Id. at 24.
rendered by the Supreme Court in the above-entitled case, the [12]
 Id. at 18.
original of which was received by this Office on September 4,
2017 at 3:00 p.m. [13]
 Olayta-Camba v. Atty. Bongon, 757 Phil. 1, 5-6 (2015).

Very truly  Llunar v. Ricafort, A.C. No. 6484, June 16, 2015, 757 SCRA
[14]

yours, 614, 620.

(SGD) [15]
 A.C. No. 11064, September 27, 2016.
FELIPA G.
BORLONGAN- [16]
 Id. at 6-7.
ANAMA
  Clerk of Court [17]
 Nacar v. Gallery Frames, 716 Phil. 267, 283 (2013).

[1]
 Rollo, pp. 2-4.
SEPARATE OPINION
[2]
 Id. at 20-24.
LEONEN, J.:
[3]
 Id. at 21.
I concur with the ponencia's findings but vote to still impose the
[4]
 Id. at 10. penalty of disbarment on respondent. I am aware that she has
already been disbarred.
[5]
 Id. at 11.
The majority found that respondent's acts merited the penalty
[6]
 Id. at 13. of disbarment but that this Court cannot disbar her again as
she was already disbarred by virtue of Suarez v. Maravilla-Ona.
[7]
 Id. at 15. [1]
In the past, this Court has imposed the penalty of suspension
on lawyers who have already been disbarred. In Sanchez v.
Torres,[2] for the purpose of recording the case in the
respondent's personal file in the Office of the Bar Confidant,
this Court suspended him for two (2) years even though he had
been disbarred in an earlier case.[3] Likewise, in Paras v. Paras,
[4]
 the respondent was penalized with suspension for six (6)
months, although the Court acknowledged that the suspension
could no longer be effectuated due to his previous disbarment.[5]
Paras adopted the reasoning in Sanchez that the penalty should
still be meted out for recording with the Office of the Bar
Confidant. If a disbarred lawyer may later be penalized with
suspension for another complaint, then it stands to reason that
disbarment may also still be imposed.
The imposition of a penalty is distinct from its service, although
these concepts are related.[6]
In criminal law, this Court has adopted the legal fiction that
courts may sentence a person convicted of multiple offenses
with the penalties corresponding to each offense, even if the law
enforces a maximum duration on the convict's service of the
sentences imposed.[7] Thus, in People v. Peralta,[8] it was
emphasized that courts shall impose as many penalties as there
are separate and distinct offenses committed, charged, and
proved. Each offense carries its own individual penalty. That the
service of penalties may be impossible or impractical should not
deter courts from imposing those prescribed by law or
jurisprudence.[9] Far from being a useless formality, the
imposition of multiple penalties emphasizes the reprehensible
character of the convict's acts. It serves as a warning against an
improvident grant of clemency to the offender in the future. [10]
In the same way, the imposition of the penalty of disbarment on
a previously disbarred lawyer has meaningful consequences.
While disbarred lawyers cannot be disbarred again, they may
simultaneously serve multiple penalties of disbarment already
imposed, akin to the service of multiple penalties of
disqualification from public office, profession, calling, or
exercise of the right to suffrage.[11] As stated
in Sanchez and Paras, the penalty imposed shall be recorded in
the respondent's file in the Office of the Bar Confidant. It is a
warning to the bench and bar that the acts committed by the
lawyer are anathema to the legal profession, meriting the most
severe sanctions.
The imposition of the proper penalty also does justice to those
the lawyer has wronged. It communicates to them that her
transgressions of her oath as a lawyer and against the canons
of the legal profession are not tolerated by this Court. Past
serious offenses by the same lawyer should not amount to a
mitigation of the penalty to be imposed. If they amount to
anything, past transgressions should be aggravating.
Furthermore, multiple penalties will signal to this Court and to
the public that clemency may not be granted should the
respondent request for it in the future.
Respondent's blatant disregard of her oath as a lawyer and the
Code of Professional Responsibility in this case demands her
disbarment. The penalty for her acts should not be mitigated in
any form whatsoever.
ACCORDINGLY, I vote to hold Atty. Eleonor Maravilla-
Ona GUILTY of gross and continuing violation of the Code of
Professional Responsibility. I vote that she be DISBARRED from
the practice of law and that she be ORDERED TO
PAY complainants the amount of P350,000.00 with twelve
percent (12%) interest from the date of demand until June 30,
2013 and six percent (6%) per annum from July 1, 2013 until
full payment.
 maximum duration of the convict's sentence shall not be more
 A.C. No. 11064, September 27, 2016,
[1]
than three-fold the length of time corresponding to the most
<http://sc.judiciary.gov.ph/pdf/web/viewer.html? severe of the penalties imposed upon him. No other penalty to
file=/jurisprudence/2016/september2016/11064.pdf> [Per which he may be liable shall be inflicted after the sum total of
Curiam, En Banc]. those imposed equals the said maximum period.
[2]
 748 Phil. 18 (2014) [Per Curiam, En Banc]. Such maximum period shall in no case exceed forty years.
[3]
 Id. at 24. [8]
 134 Phil. 703, 731 (1968) [Per Curiam, En Banc].

 A.C. No. 5333, March 13, 2017,

[4] [9]
 Id. at 731.
<http://sc.judiciary.gov.ph/pdf/web/viewer.html?
file=/jurisprudence/2017/march2017/5333.pdf> [Per J. Perlas- [10]
 Id.
Bernabe, First Division].
 In The Matter of the Petition for Habeas Corpus of Pete C.
[11]

[5]
 Id. at 7. Lagran, 415 Phil. 506, 510 (2001) [Per J. Puno, First Division].

 People v. Peralta, 134 Phil. 703, 731 (1968) [Per Curiam, En

[6]

Banc].
[7]
 See Rev. Pen. Code, art. 70, which states: 

Art. 70. Successive service of sentences. - When the culprit has

to serve two or more penalties, he shall serve them
simultaneously if the nature of the penalties will so permit;
otherwise, the following rules shall be observed: Source: Supreme Court E-Library | Date created: January 06,
2020 
In the imposition of the penalties, the order of their respective This page was dynamically generated by the E-Library Content
severity shall be followed so that they may be executed Management System
successively or as nearly as may be possible, should a pardon
have been granted as to the penalty or penalties first imposed,
or should they have been served out. Supreme Court E-Library

....

Notwithstanding the provisions of the rule next preceding, the


813 Phil. 685
THIRD DIVISION
[ G.R. No. 201018, July 12, 2017 ]
UNITED COCONUT CHEMICALS, INC., PETITIONER, VS.
VICTORIANO B. VALMORES, RESPONDENT.
DECISION
BERSAMIN, J.:  date of dismissal on 22 February 1996 to the date of actual
The base figure in the determination of full backwages is fixed
at the salary rate received by the employee at the time he was
illegally dismissed. The award shall include the benefits and
allowances regularly received by the employee as of the time of
the illegal dismissal, as well as those granted under the
Collective Bargaining Agreement (CBA), if any.
The Case
The petitioner United Coconut Chemicals, Inc. (UCCI) appeals
the decision promulgated on August 23, 2011,[1] whereby the
Court of Appeals (CA) upheld the order of the National Labor
Relations Commission (NLRC)[2] to remand the case to the Labor
Arbiter for the re-computation of the respondent's full
backwages.
Antecedents
UCCI hired the respondent as its Senior Utilities Inspector with
a monthly salary of P11,194.00. He then became a member of
the United Coconut Chemicals, Inc. Employees' Labor
Organization (UELO) until his expulsion sometime in 1995.
[3]
 Due to the expulsion, UELO formally demanded that UCCI
terminate the services of the respondent pursuant to the union
security clause of the CBA. UCCI dismissed him on February
22, 1996.[4] He then filed a complaint for illegal dismissal in the
NLRC.[5] After due proceedings, the Labor Arbiter dismissed his
complaint for lack of merit.[6] On appeal, however, the NLRC
reversed the Labor Arbiter and disposed as follows:
WHEREFORE, premises considered, the appeal is GRANTED.
The Decision appealed from is SET ASIDE and a new one
entered finding respondents liable for illegal dismissal and
ordered them to reinstate complainant to his former position
without loss of seniority rights and with full backwages from the
reinstatement.
SO ORDERED.[7]
The parties, including UELO, moved for reconsideration. The
NLRC denied the motions for reconsideration of the respondent
and UELO, but partially granted UCCI's motion by granting its
prayer to be exempted from paying backwages.[8]
Consequently, the respondent and UELO separately elevated
the matter to the CA on certiorari, insisting that the NLRC
thereby committed grave abuse of discretion amounting to lack
or excess of jurisdiction.
On January 18, 2002,[9] the CA promulgated its decision
disposing as follows:
WHEREFORE, foregoing considered, the DECISION of the Third
Division of NLRC dated November 29, 2000 is AFFIRMED in all
respect.
The Resolution of the Third Division of NLRC dated January 31,
2001 which states:
"The motion for reconsideration filed by respondent United complainant until he was declared in AWOL and consequently
Coconut Chemicals from the decision of November 29, 2000 is terminated from work. Thus;
partially GRANTED in that it is not held liable insofar as the
award of full backwages in favor of complainant is concerned."
Backwages:
is ordered DELETED and declared null and void.
P11,194.00 x
P1,659,622.44 
148.26
SO ORDERED.[10]
months =
Still, UCCI appealed to the Court, which, on November 17,
13th Month
2003, denied the petition for review on certiorari.[11] The denial
Pay:
became final and executory on February 26, 2004;[12] hence, the P 138,301.87 
P1,659,622.44
respondent moved for the execution of the judgment in his
/ 12 months =
favor.
SILP:
P11,194.00 30
On January 18, 2010, Labor Arbiter Michaela A. Lontoc issued  
days x 5
an order decreeing thusly:
days/12 mos.
WHEREFORE, respondent [UCCI's] motion to hold respondent
x 148.26 mos.
UELO primarily liable to pay complainant the herein monetary P 23,050.31 
=
awards and/or direct respondent UELO to reimburse [UCCI] of
P
whatever amount it may be made to pay complainant, disguised TOTAL  
1,820,974.62
as a motion for clarification, is DENIED for lack of legal basis.
We do not neglect that in some of complainant's pleadings, he
Complainant's motion for execution dated 29 November 2000 offered the computation of his backwages, which included a list
is GRANTED. Let a writ of execution be issued for its immediate of the benefits he claimed should be included, thus:
implementation. Safety
Monthly Meal Financial Medical
Incentive SOFA
SO ORDERED.[13] Wage Subsidy Grant Assistance
Pay
Labor Arbiter Lontoc opined that the backwages due to the
1996 11,194.00 22.50 --- 1,000.00 2,500.00 3,800.00
respondent should be computed by excluding the benefits
under the CBA, to wit: 1997 12,444.00 25.00 --- 1,000.00 2,500.00 3,800.00
In fine, we compute the backwages of complainant beginning 22 1998 13,814.00 35.00 300.00 2,500.00 4,000.00 5,500.00
February 1996 as directed in the 29 November 2000 decision of 1999 15,314.00 35.00 300.00 2,500.00 4,000.00 5,500.00
the NLRC up to 30 June 2008. Complainant was admittedly 2000 15,314.00 37.00 300.00 2,500.00 4,000.00 5,500.00
reinstated to work effective on 01 July 2008, with the 2001 16,314.00 37.00 300.00 2,500.00 4,000.00 5,500.00
corresponding wages beginning said period paid and received by 2002 17,314.00 37.00 300.00 2,500.00 4,000.00 5,500.00
2003 19,064.00 40.00 500.00 2,500.00 4,000.00 6,500.00
2004 20,564.00 40.00 500.00 2,600.00 4,000.00 6,500.00
2005 22,564.00 40.00 500.00 2,600.00 5,000.00 10,000.00
2006 24,564.00 40.00 500.00 2,600.00 5,000.00 10,000.00
2007 26,614.00 40.00 500.00 2,600.00 5,000.00 10,000.00
One-time CBA
P20,000.00
increase 2000
Built-in OT/NSD P35,044.29/annum
Other bonuses P 5,000/annum
Rice subsidy one sack / month
Uniform P8,765.00 monetary equivalent/annum
Christmas packageP1,000.00 / annum
VL/SL 46 days / annum
We cannot recognize these alleged CBA granted benefits. While
the term "backwages" used in Article 279 of the Labor Code
includes the benefits which the complainant should have
received had he not been dismissed from work, benefits which
are not prescribed by law of those referring to benefits granted
by the employer either pursuant to the CBA or its benevolence,
cannot be recognized unless duly proved. The decision dated 29
November 2000, which is the subject of the instant execution
proceedings, did not recognize the foregoing alleged CBA and
company issued benefits, although they were enumerated by
complainant in his position paper. Neither did we find the basis
of these alleged CBA negotiated benefits. While complainant
attached a few pages of what purports to be their collective
bargaining agreement, the effectivity date thereof was never
presented for the NLRC and for us to determine the dates of
their applicability. Thus, complainant's entitlement to these
benefits was not substantially proven. For the same reason, we
have no basis to consider the same. Except for the bare
allegation that he should have been paid these benefits, no
proof of such grant was presented by complainant.
Corollary, we can only recognize the legally mandated benefits
that need not be established by substantial evidence, i.e., the
13th month pay and service incentive 1eave.[14]
On June 29, 2010, the NLRC issued its resolution remanding
the case to the Labor Arbiter for the recomputation of the
backwages inclusive of the benefits granted under the CBA,
[15]
 disposing:
WHEREFORE, the decision dated 10 January 2010 is
MODIFIED. The case is remanded to the Arbitration Branch of
origin only for the purpose of recomputation of complainant's
full backwages using the Collective Bargaining Agreement for
the covered period as basis of computation. Respondent [UCCI]
is directed to furnish the office of the Labor Arbiter's copies of
the Collective Bargaining Agreement pertinent thereto.
The other findings are AFFIRMED. 
SO ORDERED.[16]
The NLRC observed that there was a need to include the
benefits granted under the CBA; that in the personnel action
form submitted by UCCI, the reinstatement salary of the
respondent amounted to 26,614.00 as opposed to the
P11,194.00 alleged salary at the time of his dismissal; and the
disparity should have prompted the Labor Arbiter to probe into
his claim of entitlement to the benefits under the CBA as part of
his backwages.[17]
Judgment of the CA
Not satisfied, UCCI assailed the resolution issued on June 29,
2010 by the NLRC on certiorari.
On August 23, 2011, the CA upheld the NLRC, agreeing with
the latter's observation that UCCI had failed to submit the
documents providing the details of the benefits granted to its
employees from the time when the respondent was illegally
terminated until his reinstatement on July 1, 2008. It
cited Fulache v. ABS-CBN Broadcasting Corporation[18] in holding
that illegally dismissed employees were also entitled to the CBA
benefits.[19]
Upon denial of its motion for reconsideration,[20] UCCI now
appeals by petition for review on certiorari.
We note that during the pendency of the appeal, Isaias A.
Valmores, Sr. and Leonarda B. Valmores, the parents of the
respondent, prayed for their substitution herein in view of the
respondent's intervening demise.[21]
Issues
UCCI submits that:
THE COMPUTATION FOR THE PAYMENT OF BACKWAGES
SHOULD CONFORM TO ESTABLISHED JURISPRUDENCE
WHICH PROVIDES THAT THE BASE FIGURE TO BE USED IN
THE COMPUTATION OF BACKWAGES IS PEGGED AT THE
WAGE RATE AT THE TIME OF THE EMPLOYEE'S DISMISSAL
UNQUALIFIED BY DEDUCTIONS, INCREASES AND/OR
MODIFICATIONS GRANTED IN THE INTERIM[22]
Citing BPI Employees' Union-Metro Manila v. Bank of the
Philippine Islands,[23] UCCI posits that in determining the
respondent's backwages the prospective increases in wages as
well as the benefits provided in the CBA should be excluded;
that, as a consequence, the base figure for computing the
respondent's backwages should be his basic salary prevailing at
the time of his dismissal, unqualified by deductions or
increases; that the ruling of the CA and the NLRC to include the
CBA-granted benefits was without legal basis and was contrary
to prevailing jurisprudence; and that at any rate the respondent
did not establish that he was enjoying such CBA benefits at the
time of his dismissal.
In contrast, the respondent, now represented by his parents,
manifests that he would not oppose the computation of the
backwages in accordance with the BPI Employees' Union-Metro
Manila ruling, provided that: (1) the 12% interest per
annum imposed from the time when the decision became final
until full payment based on BPI Employees' Union-Metro
Manila should be applied herein; and (2) that all CBA benefits
being received by the respondent at the time of his dismissal
should be added to his basic salary. He maintains that UCCI
should alone be held liable for the payment of backwages
instead of being held jointly liable with UELO.
In riposte, UCCI argues that it could not be solely held liable for
the payment of backwages because of the express ruling of the
NLRC on November 29, 2000 (as upheld by the CA and affirmed
by this Court) declaring it and UELO liable for illegal dismissal;
and that the respondent cannot belatedly raise the matter
during the period of execution inasmuch as the matter should
have been properly raised while the NLRC's decision was still on
appeal.
In fine, the Court shall now determine the following, namely: (1)
the correct basis for computing the backwages of the
respondent; (2) the nature of UCCI's liability for payment of full
backwages; and (3) the proper interest rate to be imposed on
the judgment award.
Ruling of the Court
We deny the petition for review on certiorari.
I
Backwages include all benefits previously enjoyed by the
illegally dismissed employee
The extent of the backwages to be awarded to an illegally
dismissed employee has been set in Article 279[24] of the Labor
Code, viz.:
Article 279. Security of Tenure. - In cases of regular
employment, the employer shall not terminate the services of an
employee except for a just cause or when authorized by this
Title. An employee who is unjustly dismissed from work
shall be entitled to reinstatement without loss of seniority
rights and other privileges and to his full backwages,
inclusive of allowances, and to his other benefits or their
monetary equivalent computed from the time his
compensation was withheld from him up to the time of his
actual reinstatement.
The settled rule is that full backwages shall be pegged at the
wage rate at the time of the employee's dismissal, unqualified
by any deductions and increases, thus:
[T]he determination of the salary base for the computation of
backwages requires simply an application of judicial precedents
defining the term "backwages." An unqualified award of
backwages means that the employee is paid at the wage rate at
the time of his dismissal. Furthermore, the award of salary
differentials is not allowed, the established rule being that upon
reinstatement, illegally dismissed employees are to be paid their
backwages without deduction and qualification as to any wage
increases or other benefits that may have been received by their
co-workers who were not dismissed or did not go on strike.[25]
The base figure for the computation of backwages should
include not only the basic salary but also the regular
allowances being received, such as the emergency living
allowances and the 13th month pay mandated by the law.[26] The
purpose for this is to compensate the worker for what he has
lost because of his dismissal, and to set the price or penalty on
the employer for illegally dismissing his employee.[27]
Conformably with the foregoing guidelines, the Labor Arbiter did
not err in using P11,194.00 as the base figure because the sum
represented the respondent's wage rate at the time of his
dismissal on February 22, 1996. Also, the Labor Arbiter
properly included in the computation the respondent's
13th month pay and service incentive leave.
The respondent insisted before the Labor Arbiter that his CBA -
granted benefits should be included, but UCCI opposed, citing
the 2011 ruling in BPI Employees' Union-Metro Manila v. Bank of
the Philippine Islands. It contended that any computation that
reflected increases during the period of his dismissal would be
incorrect for want of legal basis and for being contrary to
prevailing jurisprudence.
We agree with UCCI.
The base figure to be used in reckoning full backwages is the
salary rate of the employee at the time of his dismissal. The
amount does not include the increases or benefits granted
during the period of his dismissal because time stood still for
him at the precise moment of his termination, and move
forward only upon his reinstatement. Hence, the respondent
should only receive backwages that included the amounts being
received by him at the time of his illegal dismissal but not the
benefits granted to his coemployees after his dismissal.
The Court is also aware of the reality that salary increases and
benefits are not automatically given to the worker, but are given
subject to conditions. As such, the respondent's claim for the
increases in salary, meal subsidy, safety incentive pay, SOFA,
financial grant and medical assistance for the period from 1997
until 2007, and one-time CBA increase, should be excluded
from his backwages.
CBA allowances and benefits that the respondent was regularly
receiving before his illegal dismissal on February 22, 1996
should be added to the base figure of P11,194.00. This is
because Article 279 of the Labor Code decrees that the
backwages shall be "inclusive of allowances, and to his other
benefits or their monetary equivalent." Considering that the law
does not distinguish between the benefits granted by the
employer and those granted under the CBA, he should not be
denied the latter benefits.
Nonetheless, the respondent still had to prove his entitlement to
the benefits by submitting proof of his having received the same
at the time of his illegal dismissal. In BPI Employees' Union-
Metro Manila, the claim for CBA benefits such as the signing
bonus, medical and doctor's allowance, and dental allowance
was denied because the employee was unable to prove that he
was receiving such benefits at the time of the illegal dismissal.
To do so, therefore, the respondent must have submitted before
the Labor Arbiter sufficient evidence establishing his receiving
meal subsidy, SOFA, financial grant, medical assistance, built-
in overtime and night shift differential, rice subsidy, uniform
allowance, Christmas package, vacation and sick leave at the
time he was dismissed. Yet, the respondent was unable to
discharge his burden because the relevant documents,
including the CBA, had been in UCCI's exclusive possession
and custody. Unfortunately, the Labor Arbiter did not rule on
his motion to compel the production of the documents by
subpoena duces tecum because, as the NLRC put it:[28]
The Labor Arbiter did not recognize the CBA benefits which
complainant alleged should have been included in the
computation because the complainant failed to prove the same.
On 2 June 2008, the complainant filed a motion xxxx for
computation of backwages and issuance of subpoena to the
personnel manager/payroll officer or any employee of
respondent employer-company to bring documents as well as
the Collective Bargaining Agreement in force related to the latest
salary/benefits of a Senior Utilities Operator and to testify
thereon. This motion was not resolved by the Labor Arbiter.
xxxx On 1 July 2008, respondent [UCCI] in its personnel action
form xxx admitted complainant's re-instatement salary to be
P26,614.00 per month. The difference or disparity between the
amount of P11,194.00 allegedly complainant's salary at the
time of his dismissal on 26 February 2006 and P26,614.00
salary of complainant for the month of July 2008 should have
prompted the Labor Arbiter to dig deeper into the allegations of
complainant that he is entitled to other benefits under the CBA,
the same to form part of the full backwages awarded to him.
The observations of the CA on this are adopted with approval, to
wit:
In the case at bench, it is undisputed that private respondent
was a regular employee of petitioner UCCI and a member of
UELO. A perusal of the records also shows that his expulsion
from the union was deemed unjustified. This was the finding of
the Former Sixth Division of this Court in its Decision dated
January 18, 2002. Had private respondent not been unlawfully
ousted from the union and unjustly terminated from work, he
would have been entitled to the benefits being regularly received
by the employees of petitioner UCCI who are members of the
bargaining unit. As aptly noted by the NLRC, petitioner UCCI
failed to submit the documents providing the details of benefits
granted to its employees from the time of private respondent's
dismissal on February 22, 1996 up to the date of his
reinstatement. The presumption that evidence willfully
suppressed would be adverse if produced thus applies.
Consequently, We sustain the NLRC's ruling that private
respondent's full backwages should be re-computed in order to
include the benefits regularly given to petitioner UCCI's
employees under the CBA.[29]
We consider as patent error on the part of the Labor Arbiter to
declare that the respondent had not proved his entitlement to
the CBA benefits. Accordingly, the remand to enable the proper
determination of the CBA benefits that the respondent had been
receiving as of February 22, 2006 is proper and necessary.
 II
UCCI is solely liable for the payment of backwages
The respondent submits that UCCI, as the employer, was solely
liable for the payment of backwages. UCCI counters that the
NLRC's decision promulgated on November 29, 2000, which the
Court already affirmed, declared both UCCI and the UELO as
liable for the backwages to the respondent; and insists that
because the NLRC's decision had already become final and
executory, no modifications thereof can be allowed without
violating the rule on immutability of a final decision.
UCCI is mistaken.
The November 29, 2000 decision of the NLRC faulted the UCCI
for dismissing the respondent without cause and for non-
observance of procedural due process. The body of the decision
explained how the UELO had wrongly expelled him from its
membership, but such explanation was made only to highlight
how the UCCI had not conducted its own investigation of the
circumstances behind his expulsion in order to determine for
itself whether or not the union security clause was applicable.
Although the NLRC did not include in the body of its decision
anything to the effect that UELO should be liable for the
respondent's expulsion, it nonetheless decreed:
WHEREFORE, premises considered, the appeal is GRANTED.
The Decision appealed from is SET ASIDE and a new one
entered finding respondents liable for illegal dismissal and
ordering them to reinstate complainant to his former
position without loss of seniority rights and with full
backwages from the date of dismissal on 22 February 1996 to
the date of actual reinstatement.
SO ORDERED.[30]
There is thus a conflict between the body of the decision and
the dispositive portion or the fallo. As a rule, the fallo controls
in such a situation on the theory that the fallo is the final order,
while the opinion stated in the body is a mere statement
ordering nothing.[31] However, where the inevitable conclusion
from the body of the decision is so clear as to show that there
was a mistake in the dispositive portion, the body of the
decision should prevail.[32] Indeed, the rationality of the decision
should justify the fallo. To say otherwise is to tolerate a farce.
We have no doubt at all that the exception fully applies herein.
Verily, the petitioner, as the employer effecting the unlawful
dismissal, was solely liable for the backwages of the respondent,
its employee. In General Milling Corporation v. Casio,[33] we
explained the liability of the employer in case of the unlawful
termination pursuant to the union security provision of the
CBA, viz.:
xxxx Despite a closed shop provision in the CBA and the
expulsion of Casio, et al. from IBP-Local 31, law and
jurisprudence imposes upon GMC the obligation to accord
Casio, et al. substantive and procedural due process before
complying with the demand of IBP-Local 31 to dismiss the
expelled union members from service. The failure of GMC to
carry out this obligation makes it liable for illegal dismissal of
Casio, et al.
In Malayang Samahan ng mga Manggagawa sa M. Greenfield,
the Court held that notwithstanding the fact that the dismissal
was at the instance of the federation and that the federation
undertook to hold the company free from any liability resulting
from the dismissal of several employees, the company may still
be held liable if it was remiss in its duty to accord the would-be
dismissed employees their right to be heard on the matter.
III
The interest rate to be imposed on the judgment award
 interest of 12% per annum of the total monetary awards
The position of the respondent that the interest rate to be computed from finality of the illegal dismissal case on November
imposed on the monetary award should be fixed at 12% per 17, 2003 until their full satisfaction.
annum reckoned from the finality of the decision of the NLRC
until full payment is warranted and upheld. Pursuant to Article Costs of suit to be paid by the petitioner.
2209 of the Civil Code,[34] interest at the legal rate should be
imposed on the monetary awards in favor of the respondent SO ORDERED.
because UCCI incurred a delay in discharging its legal
obligations to pay him full backwages. In BPI Employees Union- Martires,** and Tijam, JJ., concur.
Metro Manila,[35] the Court, conformably with Eastern Shipping Del Castillo,* J., on wellness leave.
Lines, Inc. v. Court of Appeals,[36] imposed interest of 12% per
annum on the monetary award in favor of the employee from
the finality of the decision until full satisfaction "for the delay
caused." Considering that the decision of the NLRC in favor of August 16, 2017
the respondent became final and executory on November 17,
2003, Eastern Shipping Lines, Inc. was the prevailing rule on the NOTICE OF JUDGMENT
legal rate of interest.
Sirs / Mesdames:
WHEREFORE, the Court GRANTS the Motion for Substitution
filed by the Heirs of Victoriano B. Valmores, and, Please take notice that on July 12, 2017 a Decision, copy
accordingly, AUTHORIZES the substitution of the respondent
attached hereto, was rendered by the Supreme Court in the
by his parents Spouses Isaias A. Valmores, Sr. and Leonarda B.
Valmores; DENIES the petition for review on certiorari for its above-entitled case, the original of which was received by this
lack of merit; and AFFIRMS the decision promulgated on Office on August 16, 2017 at 9:55 a.m.
August 23, 2011 by the Court of Appeals, subject to the
following MODIFICATIONS, namely: Very truly
yours,
(a) REMANDING the case to the Labor Arbiter for the
recomputation of respondent Victoriano B. Valmores' full (SGD)
backwages using the base figure of 11,194.00 plus the other WILFREDO V.
benefits and allowances granted under the Collective Bargaining LAPITAN
Agreement being regularly received by him as of February 22, Division Clerk
 
1996, and of Court

(b) DECLARING petitioner United Coconut Chemicals, Inc.

solely liable to pay the respondent's full backwages plus legal
 In lieu of Justice Francis H. Jardeleza, who inhibited due to
* [12]
 Id. at 102.
prior close relations with a party, per the raffle of July 3, 2017.
[13]
 Id. at 113-114.
 Additional Member, per Special Order No. 2461 dated July 10,
**

2017. [14]
 Id. at 112-113.

 Rollo, pp. 34-45; penned by Associate Justice Ramon R.

[1] [15]
 Id. at 50-60.
Garcia, with Associate Justice Rosmari D. Carandang and
Associate Justice Samuel H. Gaerlan, concurring. [16]
 Id. at 59.
[2]
 Id. at 50-60. [17]
 Id. at 57-58.
[3]
 Id. at 35. [18]
 G.R. No. 183810, January 21, 2010, 610 SCRA 567.
[4]
 Id. at 35-36. [19]
 Rollo, pp. 43-44.

 Docketed as NLRC Case No. RAB-IV-02-07928-96-B

[5] [20]
 Id. at 47-48.
entitled Victoriano B. Valmores v. United Coconut Chemicals, Inc.
(COCOCHEM) and United Coconut Chemicals, Inc. Employees' [21]
 Id. at 119-124.
Labor Organization, its Executive Officers led by Mr. Nello
Borbon. [22]
 Id. at 20.
[6]
 Rollo, pp. 62-71.  G.R. Nos. 178699 and 178735, September 21, 2011, 658
[23]

SCRA 127.
[7]
 Id. at 88.
 Now Article 294 pursuant to R.A. No. 10151 (See DOLE
[24]

[8]
 Id. at 91-92. Department Advisory No. 01, series of 2015).

 Id. at 90-98; penned by Associate Justice Eugenio S.

[9]
 Evangelista v. National Labor Relations Commission, G.R. No.
[25]

Labitoria and concurred in by Associate Justice Teodoro P. 93915, October 11, 1995, 248 SCRA 194, 196,
Regino and Associate Justice Rebecca De Guia-Salvador. citing Paramount Vinyl Products Corp. v. National Labor
Relations Commission, G.R. No. 81200, October 17, 1990, 190
[10]
 Id. at 97-98. SCRA 525, 537.
[11]
 Id. at 100.  Paramount Vinyl Products Corp. v. National Labor Relations
[26]

Commission, G.R. No. 81200, October 17, 1990, 190 SCRA 525,
537.

 Bustamante v. National Labor Relations Commission, G.R. No.

[27]

111651, November 28, 1996, 265 SCRA 61, 70. Source: Supreme Court E-Library | Date created: November 04,
2019 
[28]
 Rollo, pp. 57-58. This page was dynamically generated by the E-Library Content
Management System
[29]
 Id. at 43-44.
[30]
 Id. at 88 (bold underscoring supplied for emphasis).
Supreme Court E-Library
 Florentino v. Rivera, G.R. No. 167968, January 23, 2006, 479
[31]

SCRA 522, 528-529; Asian Center for Career and Employment

System and Services, Inc. (ACCESS) v. NLRC, G.R. No. 131656,
October 12, 1998, 297 SCRA 727, 731.

 Asian Center for Career and Employment System and

[32]

Services, Inc. (ACCESS) v. NLRC, G.R. No. 131656, October 12,

1998, 297 SCRA 727, 731-732.
[33]
 G.R. No. 149552, March 10, 2010, 615 SCRA 13, 37.

 Article 2209. If the obligation consists in the payment of a

[34]

sum of money, and the debtor incurs in delay, the indemnity for
damages, there being no stipulation to the contrary, shall be the
payment of the interest agreed upon, and in the absence of
stipulation, the legal interest, which is six per cent per annum.
(1108)
[35]
 Supra note 23.
[36]
 G.R. No. 97412, July 12, 1994, 234 SCRA 78.

811 Phil. 819
FIRST DIVISION
[ G.R. No. 223844, June 28, 2017 ]
DANILO CALIVO CARIAGA, PETITIONER, V. EMMANUEL D.
SAPIGAO AND GINALYN C. ACOSTA, RESPONDENTS.
DECISION
PERLAS-BERNABE, J.:  ammunitions, the criminal case for illegal possession of
Assailed in this petition for review on certiorari[1] are the
Resolutions dated June 17, 2015[2] and March 17, 2016[3] of the
Court of Appeals (CA) in CA-G.R. SP No. 140206 dismissing
petitioner Danilo Calivo Cariaga's (Cariaga) petition for
review[4] before it on the ground of non-exhaustion of
administrative remedies.
The Facts
The instant case stemmed from a Complaint Affidavit[5] filed by
Cariaga before the Office of the Provincial Prosecutor (OPP)
Urdaneta City, Pangasinan accusing respondents Emmanuel D.
Sapigao (Sapigao) and Ginalyn C. Acosta (Acosta; collectively,
respondents) of the crimes of Falsification of Public Documents,
False Certification, and Slander by Deed, defined and penalized
under Articles 171, 174, and 359 of the Revised Penal Code
(RPC). In the said complaint, Cariaga alleged that respondents,
in their respective capacities as Barangay Chairman and
Secretary of Brgy. Carosucan Sur, Asingan, Pangasinan, made
two (2) spurious entries in the barangay blotter, i.e., (a) Entry
No. 00054[6] dated August 3, 2012[7] stating that an unnamed
resident reported that someone was firing a gun inside
Cariaga's compound, and that when Sapigao went thereat, he
was able to confirm that the gunfire came from inside the
compound and was directed towards the adjacent ricefields;
and (b) Entry No. 00057[8] dated September 26, 2012 stating
that a concerned but unnamed resident reported to Sapigao
that Cariaga and his companions attended the funeral march of
former Kagawad Rodrigo Calivo, Sr. (Calivo, Sr.) with firearms
visibly tucked in their waists (blotter entries). According to
Cariaga, the police authorities used the blotter entries to obtain
a warrant for the search and seizure operation made inside his
residence and cattle farm on December 18, 2012. While such
operation resulted in the confiscation of a firearm and several
firearms consequently filed against him was dismissed by the
Regional Trial Court of Urdaneta City.[9] Claiming that the
statements in the blotter entries were completely false and were
made to dishonor and discredit him, Cariaga filed the said
complaint, docketed as NPS-I-01e-INV-14B-00084.[10]
In his defense,[11] Sapigao denied the accusations against him,
maintaining that the blotter entries were true, as he personally
witnessed their details. In this regard, he presented the Joint
Affidavit[12] executed by Barangay Kagawads Elpidio Cariaga,
Metrinio Dela Cruz, Greg Turalba, and Ex-
Barangay Kagawad Jaime Aguida attesting that: (a) during the
funeral march of Calivo, Sr., they observed that Cariaga and his
employees had handguns tucked into their waists; and (b) the
firing of guns was a common occurrence in Cariaga's farm.
[13]
 For her part,[14]Acosta averred that she was merely
performing her duties as Barangay Secretary when she certified
as true copies the photocopies of the aforesaid blotter entries
requested by the police authorities.[15]
The OPP's Ruling
In a Resolution[16] dated April 10, 2014, the OPP dismissed the
complaint for lack of probable cause. It found that the
questioned blotter entries were all made in good faith and
merely for recording purposes; done in the performance of
respondents' official duties; and based on personal knowledge of
what actually transpired. In this relation, the OPP pointed out
that Cariaga's complaint and supporting affidavits, which
mainly consist of a general and blanket denial of the incidents
described in the blotter entries, could not prevail over the
positive and categorical testimonies of Sapigao and his
witnesses.[17]
Cariaga moved for reconsideration[18] which was, however,
denied in a Resolution[19] dated July 28, 2014. Aggrieved, he
filed a petition for review[20] before the Office of the Regional
State Prosecutor (ORSP) - Urdaneta City, Pangasinan.[21]
The ORSP's Ruling
In a Resolution[22] dated January 5, 2015, the ORSP affirmed
the OPP's ruling. The ORSP found that absent any showing of
ill-motive on respondents' part in making the blotter entries,
there can be no basis to charge them of Falsification of Private
Documents. This is especially so as the statements therein were
supported by testimonies of several witnesses, and there is
colorable truth to the same, since the search conducted by the
police authorities in Cariaga's home and cattle farm resulted in
the seizure of a firearm and several ammunitions and the
eventual filing of a criminal case against Cariaga for illegal
possession of firearms.[23] Further, the ORSP ruled that the
blotter entries were not intended to malign, dishonor, nor
defame Cariaga; as such, respondents could not be said to have
committed the crime of Slander by Deed.[24] Finally, the ORSP
pointed out that Acosta's mere authentication of the
photocopies of the blotter entries cannot be equated to issuing a
false certification so as to indict her of such crime.[25]
Undaunted, Cariaga moved for reconsideration,[26] but the same
was denied in a Resolution[27] dated March 14, 2015. Thus, he
filed a petition for review[28] before the CA, docketed as CA-G.R.
SP No. 140206.
The CA Ruling
In a Resolution[29] dated June 17, 2015, the CA dismissed
Cariaga's petition before it. It held that the ORSP is not the final
authority in the hierarchy of the National Prosecution Service,
as one could still appeal an unfavorable ORSP ruling to the
Secretary of Justice (SOJ). As such, Cariaga's direct and
immediate recourse to the CA to assail the ORSP ruling without
first filing a petition for review before the SOJ violated the
principle of exhaustion of administrative remedies. Thus, the
dismissal of Cariaga's petition for review is warranted.[30]
Unperturbed, Cariaga filed a motion for reconsideration,[31] but
it was denied in a Resolution[32] dated March 17, 2016; hence,
this petition.
The Issue Before the Court
The issue for the Court's resolution is whether or not the CA
correctly dismissed Cariaga's petition for review before it on the
ground of non-exhaustion of administrative remedies.
The Court's Ruling
The petition must be denied.
I.
To recapitulate, Cariaga's petition for review before the CA was
dismissed on the ground of non-exhaustion of administrative
remedies as he did not elevate the adverse ORSP ruling to the
SOJ before availing of judicial remedies.
The Department of Justice's (DOJ) Department Circular No.
70[33] dated July 3, 2000, entitled the "2000 NPS Rule on
Appeal," which governs the appeals process in the National
Prosecution Service (NPS), provides that resolutions of, inter
alia, the RSP, in cases subject of preliminary
investigation/reinvestigation shall be appealed by filing a
verified petition for review before the SOJ.[34] However, this
procedure was immediately amended by the DOJ's Department
Circular No. 70-A[35] dated July 10, 2000, entitled "Delegation of
Authority to Regional State Prosecutors to Resolve Appeals in
Certain Cases," pertinent portions of which read:
DEPARTMENT CIRCULAR NO. 70-A
SUBJECT: Delegation of Authority to Regional State
Prosecutors to Resolve Appeals in Certain Cases
In order to expedite the disposition of appealed cases governed
by Department Circular No. 70 dated July 3, 2000 ("2000 NPS
RULE ON APPEAL"), all petitions for review of resolutions of
Provincial/City Prosecutors in cases cognizable by the
Metropolitan Trial Courts, Municipal Trial Courts and
Municipal Circuit Trial Courts, except in the National Capital
Region, shall be filed with the Regional State Prosecutor
concerned who shall resolve such petitions with finality in
accordance with the pertinent rules prescribed in the said
Department Circular.
The foregoing delegation of authority notwithstanding, the
Secretary of Justice may, pursuant to his power of supervision
and control over the entire National Prosecution Service and in
the interest of justice, review the resolutions of the Regional
State Prosecutors in appealed cases. (Emphases and
underscoring supplied)
As may be gleaned above, Department Circular No. 70-A
delegated to the ORSPs the authority to rule with finality cases
subject of preliminary investigation/reinvestigation appealed
before it, provided that: (a) the case is not filed in the National
Capital Region (NCR); and (b) the case, should it proceed to the
courts, is cognizable by the Metropolitan Trial Courts,
Municipal Trial Courts and Municipal Circuit Trial Courts
(MeTCs, MTCs, and MCTCs) - which includes not only violations
of city or municipal ordinances, but also all offenses punishable
with imprisonment not exceeding six (6) years, irrespective of
the amount of fine, and regardless of other imposable accessory
or other penalties attached thereto.[36] This is, however, without
prejudice on the part of the SOJ to review the ORSP ruling
should the former deem it appropriate to do so in the interest of
justice. The foregoing amendment is further strengthened by a
later issuance, i.e., Department Circular No. 018-14[37]dated
June 18, 2014, entitled "Revised Delegation of Authority on
Appealed Cases," pertinent portions of which read:
DEPARTMENT CIRCULAR NO. 018-14
 SUBJECT: Revised Delegation of Authority on Appealed Cases
In the interest of service and pursuant to the provisions of
existing laws with the objective of institutionalizing the
Department's Zero Backlog Program on appealed cases, the
following guidelines shall be observed and implemented in the
resolution of appealed cases on Petition for Review and Motions
for Reconsideration:
1. Consistent with Department Circular No. 70-A, all
appeals from resolutions of Provincial or City
Prosecutors, except those from the National Capital
Region, in cases cognizable by the Metropolitan Trial
Courts, Municipal Trial Courts and Municipal Circuit
Trial Courts, shall be by way of a petition for review to
the concerned province or city. The Regional Prosecutor
shall resolve the petition for review with finality, in
accordance with the rules prescribed in pertinent rules
and circulars of this Department. Provided, however,
that the Secretary of Justice may, pursuant to the power
of control and supervision over the entire National
Prosecution Service, review, modify or reverse, the
resolutions of the Regional Prosecutor in these appealed
cases.
2. Appeals from resolutions of Provincial or City
Prosecutors, except those from the National Capital
Region, in all other cases shall be by way of a petition for
review to the Office of Secretary of Justice.
3. Appeals from resolutions of the City Prosecutors in the
National Capital Region in cases cognizable by
Metropolitan Trial Courts shall be by way of a petition
for review to the Prosecutor General who shall decide the
same with finality. Provided, however that the Secretary
of Justice may, pursuant to the power of control and
supervision over the entire National Prosecution Service,
review, modify or reverse, the resolutions of the
Prosecutor General in these appealed cases. 
4. Appeals from resolutions of the City Prosecutors in the
National Capital Region in all other cases shall be by
way of a petition for review to the Office of the Secretary.
xxxx
This Circular supersedes all inconsistent issuances, takes effect
on 01 July 2014 and shall remain in force until further orders.
For guidance and compliance.
A reading of the foregoing provisions shows that the prevailing
appeals process in the NPS with regard to complaints subject of
preliminary investigation would depend on two factors, namely:
where the complaint was filed, i.e., whether in the NCR or in the
provinces; and which court has original jurisdiction over the
case, i.e., whether or not it is cognizable by the
MTCs/MeTCs/MCTCs. Thus, the rule shall be as follows:
(a) If the complaint is filed outside the NCR and is cognizable by
the MTCs/MeTCs/MCTCs, the ruling of the OPP may be
appealable by way of petition for review before the ORSP,
which ruling shall be with finality;
   
(b) If the complaint is filed outside the NCR and is not
cognizable by the MTCs/MeTCs/MCTCs, the ruling of the
OPP may be appealable by way of petition for review before
SOJ, which ruling shall be with finality;
   
(c) If the complaint is filed within the NCR and is cognizable by
the MTCs/MeTCs/MCTCs, the ruling of the OCP may be
appealable by way of petition for review before the
 Prosecutor General, whose ruling shall be with finality;
   
(d) If the complaint is filed within the NCR and is not cognizable
by the MTCs/MeTCs/MCTCs, the ruling of the OCP may be
appealable by way of petition for review before the SOJ,
whose ruling shall be with finality;
(e) Provided, that in instances covered by (a) and (c), the SOJ
may, pursuant to his power of control and supervision over
the entire National Prosecution Service, review, modify, or
reverse the ruling of the ORSP or the Prosecutor General, as
the case may be.
In the instant case, Cariaga filed a complaint before the OPP in
Pangasinan (i.e., outside the NCR) accusing respondents of
committing the crimes of Falsification of Public Documents,
False Certification, and Slander by Deed, defined and penalized
under Articles 171, 174, and 359 of the RPC. Of the crimes
charged, only False Certification and Slander by Deed are
cognizable by the MTCs/MeTCs/MCTCs,[38] while Falsification of
Public Documents is cognizable by the Regional Trial Courts.
[39]
 Applying the prevailing rule on the appeals process of the
NPS, the ruling of the ORSP as regards Falsification of Public
Documents may still be appealed to the SOJ before resort to the
courts may be availed of. On the other hand, the ruling of the
ORSP pertaining to False Certification and Slander by Deed
should already be deemed final - at least insofar as the NPS is
concerned - and thus, may already be elevated to the courts.
Verily, the CA erred in completely dismissing Cariaga's petition
before it on the ground of non-exhaustion of administrative
remedies, as only the ORSP ruling regarding the crime of
Falsification of Public Documents may be referred to the SOJ,
while the ORSP ruling regarding the crimes of False
Certification and Slander by Deed may already be elevated
before the courts. Thus, the CA should have resolved Cariaga's
petition on the merits insofar as the crimes of False
Certification and Slander by Deed are concerned. In such an
instance, court procedure dictates that the instant case be
remanded to the CA for resolution on the merits. "However,
when there is already enough basis on which a proper
evaluation of the merits may be had — as in this case — the
Court may dispense with the time-consuming procedure of
remand in order to prevent further delays in the disposition of
the case and to better serve the ends of justice."[40] In view of the
foregoing - as well as the fact that Cariaga prayed for a
resolution on the merits - the Court finds it appropriate to
resolve the substantive issues of this case.
II.
In the recent case of Hilbero v. Morales, Jr.,[41] the Court
reiterated the guiding principles in determining whether or not
the courts may overturn the findings of the public prosecutor in
a preliminary investigation proceedings on the ground of grave
abuse of discretion in the exercise of his/her functions, viz.:
A public prosecutor's determination of probable cause — that
is, one made for the purpose of filing an information in
court — is essentially an executive function and, therefore,
generally lies beyond the pale of judicial scrutiny. The
exception to this rule is when such determination is tainted
with grave abuse of discretion and perforce becomes
correctible through the extraordinary writ of certiorari. It
is fundamental that the concept of grave abuse of
discretion transcends mere judgmental error as it properly
pertains to a jurisdictional aberration. While defying precise
definition, grave abuse of discretion generally refers to a
"capricious or whimsical exercise of judgment as is equivalent
to lack of jurisdiction." Corollary, the abuse of discretion must
be patent and gross so as to amount to an evasion of a positive
duty or a virtual refusal to perform a duty enjoined by law, or to
act at all in contemplation of law. To note, the underlying
principle behind the courts' power to review a public
prosecutor's determination of probable cause is to ensure
that the latter acts within the permissible bounds of his
authority or does not gravely abuse the same. This manner
of judicial review is a constitutionally-enshrined form of check
and balance which underpins the very core of our system of
government. x x x
xxxx
In the foregoing context, the Court observes that grave
abuse of discretion taints a public prosecutor's resolution if
he arbitrarily disregards the jurisprudential parameters of
probable cause. In particular, case law states that probable
cause, for the purpose of filing a criminal information, exists
when the facts are sufficient to engender a well-founded belief
that a crime has been committed and that the respondent is
probably guilty thereof. It does not mean "actual and positive
cause" nor does it import absolute certainty. Rather, it is merely
based on opinion and reasonable belief and, as such, does not
require an inquiry into whether there is sufficient evidence to
procure a conviction; it is enough that it is believed that the act
or omission complained of constitutes the offense charged. As
pronounced in Reyes v. Pearlbank Securities, Inc. [(582 Phil.
505, 591 [2008])] :
A finding of probable cause needs only to rest on evidence
showing that more likely than not a crime has been
committed by the suspects. It need not be based on clear
and convincing evidence of guilt, not on evidence
establishing guilt beyond reasonable doubt, and definitely
not on evidence establishing absolute certainty of guilt. In
determining probable cause, the average man weighs facts and
circumstances without resorting to the calibrations of the rules
of evidence of which he has no technical knowledge. He relies
on common sense. What is determined is whether there is
sufficient ground to engender a well-founded belief that a crime
has been committed, and that the accused is probably guilty
thereof and should be held for trial. It does not require an
inquiry as to whether there is sufficient evidence to secure a
conviction.[42] (Emphases in the original.)
In the instant case, a judicious perusal of the records reveals
that the ORSP correctly ruled that there is no probable cause to
indict respondents of the crimes of Slander by Deed and False
Certification. As aptly found by the ORSP, there was no
improper motive on the part of respondents in making the
blotter entries as they were made in good faith; in the
performance of their official duties as barangay officials; and
without any intention to malign, dishonor, or defame Cariaga.
Moreover, the statements contained in the blotter entries were
confirmed by disinterested parties who likewise witnessed the
incidents recorded therein. On the other hand, Cariaga's
insistence that the blotter entries were completely false
essentially rests on mere self-serving assertions that deserve no
weight in law.[43] Thus, respondents cannot be said to have
committed the crime of Slander by Deed. Furthermore, suffice it
to say that the mere act of authenticating photocopies of the
blotter entries cannot be equated to committing the crime of
False Certification under the law. In sum, the ORSP correctly
found no probable cause to indict respondents of the said
crimes.
WHEREFORE, the petition is hereby DENIED.
SO ORDERED.
Sereno, C.J., (Chairperson), Leonardo-De Castro, Del Castillo,
and Caguioa, JJ., concur.
 [15]
 See id. at 16 and 33.
[1]
 Rollo, pp. 3-17.
 Id. at 31-34. Penned by Assistant Provincial Prosecutor
[16]

 Id. at 19-23. Penned by Associate Justice Manuel M. Barrios

[2]
Adriano P. Cabida, recommended for approval by Assistant
with Associate Justices Ramon M. Bato, Jr. and Maria Elisa Provincial Prosecutor Ephraim S. Tomboc, and approved by
Sempio Diy concurring. Provincial Prosecutor Abraham L. Ramos II.

[3]
 Id. at 28-30. [17]
 See id. at 33-34.

[4]
 Dated April 24, 2015. CA rollo, pp. 3-12.  See Motion for Reconsideration with Prayer for Inhibition and
[18]

to Assign Case to Another Investigating Prosecutor and Review

[5]
 Dated February 25, 2014. Id. at 45-47. Panel dated June 3, 2014; id. at 35-41.

[6]
 Id. at 48.
[19]
 Id. at 42-43.

 Erroneously dated "August 13, 2012" in the Complaint

[7] [20]
 Not attached to the records.
Affidavit (see id. at 46).
[21]
 See rollo, p.6.
[8]
 Id. at 49.
 CA rollo, pp. 15-20. Penned by Regional Prosecutor Nonnatus
[22]

 See Resolution in Crim. Case No. U-18895 dated October 21,

[9] Caesar R. Rojas.
2013 issued by Presiding Judge Elizabeth L. Berdal; id. at 51-
54 . [23]
 See id. at 18.

[10]
 See id. at 15-16 and 31-32. [24]
 Id. at 19.

[11]
 See Counter-Affidavit dated April 1, 2014; id. at 56-57. [25]
 See id. at 19-20.

[12]
 Dated April 1, 2014. Id. at 64.  See motion for reconsideration dated February 3, 2015; id. at
[26]

21-25.
[13]
 See id. at 16 and 32-33.
[27]
 Id. at 28-30.
[14]
 See Counter Affidavit dated April 1, 2014; id. at 58.
[28]
 See id. at 3-14.
[29]
 Rollo, pp. 19-23.  See Sy-Vargas v. The Estate of Ogsos, Sr., G.R. No. 221062,
[40]

October 5, 2016, citing Gonzales v. Marmaine Realty

[30]
 See id. at 20-23. Corporation, G.R. No. 214241, January 13, 2016, 781 SCRA 63,
71.
[31]
 Dated July 20, 2015. Id. at 24-26.
[41]
 See G.R. No. 198760, January 11, 2017.
[32]
 Id. at 28-30.
[42]
 See id., citing Aguilar v. DOJ, 717 Phil. 789, 798-800 (2013).
[33]
 (September 1, 2000).
 See Reyes v. Nieva, A.C. No. 8560, September 6, 2016,
[43]

[34]
 See Sections 1 and 4 of DOJ Circular No. 70. citing People v. Mangune, 698 Phil. 759, 771 (2012).

[35]
 (September 1, 2000).

 See Section 32 of Batas Pambansa Blg. 129, entitled "AN

[36]

ACT REORGANIZING THE JUDICIARY, APPROPRIATING

FUNDS THEREFOR, AND FOR OTHER PURPOSES," otherwise
known as "THE JUDICIARY REORGANIZATION ACT OF 1980,"
as amended (August 14, 1981).

[37]
 (July 1, 2014). Source: Supreme Court E-Library | Date created: March 15,
2019 
 Both crimes of False Certification and Slander by Deed are
[38] This page was dynamically generated by the E-Library Content
punishable by arresto mayor in its maximum period to prision Management System
correccional in its minimum period, which is imprisonment for a
period ranging from four (4) months and one (1) day to two (2)
years and four (4) months. See Articles 174 and 359, in relation Supreme Court E-Library
to Article 77 of the RPC.

 Falsification of Public Document is punishable by prision

[39]

mayor, which is imprisonment for a period ranging from six (6)

years and one (1) day to twelve (12) years. See Article 171, in
relation to Article 27 of the RPC.

808 Phil. 662
THIRD DIVISION
[ G.R. No. 207667, April 17, 2017 ]
SPOUSES PROCESO O. PONTILLAS, JR. AND HELEN
S. PONTILLAS, PETITIONERS, V. CARMEN OLIVARES VDA.
DE PONTILLAS, RESPONDENT.  was filed by respondent against petitioners. In said Complaint,
DECISION
TIJAM, J.:  claim, respondent presented an Extrajudicial Settlement with
Before this Court is a Petition for Review on Certiorari [1] under
Rule 45, seeking the reversal of the: (1) Resolution[2] dated
March 29, 2012; and (2) Resolution[3] dated March 11, 2013 of
the Court of Appeals (CA) in CA-G.R. SP No. 123550.
The Facts
Respondent Carmen Olivares Vda. De Pontillas averred that she
and her late husband, Proceso, Sr. were the owners of a 863
square-meter residential lot located in Mataoroc, Minalabac,
Camarines Sur declared under A.R.P. No. 97-015-0067 in the
name of Proceso, Sr.[4]
During the lifetime of Proceso, Sr., they allowed petitioners,
spouses Proceso O. Pontillas, Jr. and Helen S. Pontillas to
occupy a fourth of the above-described land.
On June 8, 2009, Proceso, Sr. died. After his death or sometime
in February 2010, there was a falling out between petitioners
and respondent.
On April 27, 2010, respondent, through counsel, formally
demanded that petitioners vacate the subject property.
However, petitioners refused to do the same. A complaint was
then filed before the Office of the Lupong Tagapamayapa of
Brgy. Mataoroc, Minalabac, Camarines Sur, but no settlement
was reached.[5]
Subsequently, a complaint for unlawful detainer with damages
respondent prayed that she be declared as the one entitled to
the material and physical possession of the land in question
and that petitioners be ordered to vacate the premises and to
restore its physical possession to respondent. In support of her
Waiver of Rights dated July 5, 2010, whereby it is stated that all
the properties left by Proceso, Sr., including the subject
property, were waived by all the heirs in her favor.
For their part, petitioners maintained that after their marriage
in 1978, an Affidavit of Waiver was executed by respondent and
Proceso, Sr., giving them a portion of the subject land so they
could build their house thereon. Also, Proceso, Jr. denied
signing the Extrajudicial Settlement with Waiver; as such, he
claimed that the same is a product of forgery.[6]
In a Decision[7] dated June 16, 2011, the Municipal Trial Court
(MTC) dismissed the complaint for unlawful detainer with
damages and ruled that the Extrajudicial Settlement with
Waiver produces no effect because the signature of one of the
heirs, respondent Proceso, Jr., was forged. The MTC further
ruled that the subject property is part of the conjugal property
of respondent and Proceso, Sr. Upon the death of the latter,
their conjugal partnership of gains was dissolved so that all
conjugal properties of the spouses during their marriage came
under the regime of co-ownership among his heirs. As an heir of
Proceso, Sr., petitioner Proceso, Jr. is a co-owner together with
the other heirs of Proceso, Sr. As a co-owner, Proceso, Jr. has
the right to stay on the land which includes that portion
occupied by them until there has been a final liquidation and
partition of the estate of his father.
Respondent filed an Appeal before the Regional Trial Court
(RTC), Branch 24, Naga City.
In a Decision[8] dated November 23, 2011, the RTC held that the
forgery was not sufficiently proven as mere variance of the
signatures of petitioner Proceso, Jr. in said Settlement and the
sample signatures produced cannot be considered as conclusive
proof that the same were forged. Thus, on the strength of the
Extrajudicial Settlement with Waiver, the RTC reversed the
ruling of the MTC and ordered petitioners to vacate the subject
property and to remove whatever structure they had introduced
therein. Petitioners were also ordered to pay respondent a
reasonable rental amounting to PhP 500.00 per month and
costs of suit.
Petitioners filed a Petition for Review[9] under Rule 42 before the
CA.
In a Resolution[10] dated March 29, 2012, the CA dismissed the
petition outright for the following infirmities: (1) failure to
append proof of service of the petition to the adverse party; and
(2) failure to provide the updated PTR number of petitioners'
counsel.
The petitioners filed a Motion for Reconsideration[11] but the
same was denied in a Resolution[12] dated March 11, 2013.
Hence, this Petition.
The Issue
Whether or not the CA erred in dismissing the petition outright.
The Ruling
We grant the Petition.
Courts should not be unduly strict in cases involving
procedural lapses that do not really impair the proper
administration of justice. Since litigation is not a game of
technicalities, every litigant should be afforded the amplest
opportunity for the proper and just determination of his case,
free from the constraints of technicalities.[13]
While petitioners failed to attach the proof of service in their
petition before the CA, petitioners submitted an Affidavit of
Service when they filed their Motion for Reconsideration. In this
case, We deem it proper to consider that their belated
submission of said proof of service constitutes substantial
compliance.
As to the failure of petitioners' counsel to update her PTR
number, it must be considered that the purpose of requiring a
counsel to indicate her PTR number is merely to protect the
public from bogus lawyers.[14] Notably, petitioners' counsel has a
corresponding PTR number. However, she merely failed to
indicate the updated one inadvertently. Her belated submission June 6, 2017
of the same must also be treated as substantial compliance for
the danger which the law seeks to protect the public from is not NOTICE OF JUDGMENT
present in this case.
Sirs/Mesdames:
Lastly, the case of MTM Garment Manufacturing, Inc. et.al. v. CA,
et.al.[15] cited by the CA is not squarely applicable in the present
Please take notice that on April 17, 2017 a Decision, copy
case. In MTM Garment, the procedural infirmities involve the
failure to file a Petition for Certiorari within the 60-day period attached hereto, was rendered by the Supreme Court in the
and the failure to file a motion for reconsideration. None of such above-entitled case, the original of which was received by this
procedural flaws exist in the instant case and on the contrary, it Office on June 6, 2017 at 9:11 a.m.
is undisputed that petitioners timely filed their petition before
the CA.   Very truly yours,
   
Although it is true that procedural rules should be treated with
(SGD.) WILFREDO V. LAPITAN
utmost respect and due regard since they are designed to  
Division Clerk of Court
facilitate the adjudication of cases to remedy the worsening
problem of delay in the resolution of rival claims and in the
administration of justice, this is not an inflexible tenet. After all, [1]
 Rollo at pp. 3-19.
rules of procedure are mere tools designed to facilitate the
attainment of justice. Their strict and rigid application
especially on technical matters, which tends to frustrate rather
[2]
 Id. at pp. 21-22.
than promote substantial justice, must be avoided.[16]
[3]
 Id. at pp. 23-24.
WHEREFORE, the petition is GRANTED. The Resolutions dated
March 29, 2012 and March 11, 2013 of the Court of Appeals
[4]
 Id. at p. 77.
are REVERSED and SET ASIDE. The case is REMANDED to
the Court of Appeals for further proceedings. [5]
 Id.

SO ORDERED. [6]
 Id. at p. 78.

Velasco, Jr., (Chairperson), Bersamin, Reyes, and Jardeleza, [7]

 Id. at pp. 77-80.
JJ., concur. 
[8]
 Id. at pp. 81-87.
[9]
 Id. at pp. 26-42.

[10]
 Supra Note 2, at 21-22.

[11]
 Rollo at pp. 43-45.

[12]
 Supra Note 3, at 23-24.

 Barra v. Civil Service Commission, G.R. No. 205250, March

[13]

18, 2013.

[14]
 Galicto v. Aquino III, G.R. No. 193978, February 28, 2012.

[15]
 G.R. No. 152336, June 9, 2005.

 Tiorosio-Espinosa v. Hofilena-Europa, G.R. No. 185746,

[16]

January 20, 2016.

Source: Supreme Court E-Library | Date created: July 15,

2019 
This page was dynamically generated by the E-Library Content
Management System

Supreme Court E-Library


808 Phil. 1042
EN BANC
[ G.R. No. 220598, April 18, 2017 ]
GLORIA MACAPAGAL-ARROYO, PETITIONER, VS. PEOPLE
OF THE PHILIPPINES AND THESANDIGANBAYAN, (FIRST
DIVISION), RESPONDENTS.
[G.R. No. 220953]
BENIGNO B. AGUAS, PETITIONER, VS. SANDIGANBAYAN
(FIRST DIVISION), RESPONDENT.
RESOLUTION
BERSAMIN, J.: 
On July 19, 2016, the Court promulgated its decision,
disposing:
WHEREFORE, the Court GRANTS the petitions
for certiorari; ANNULS and SETS ASIDE the resolutions issued
in Criminal Case No. SB-12-CRM-0174 by
the Sandiganbayan on April 6, 2015 and September 10,
2015; GRANTS the petitioners' respective demurrers to
evidence; DISMISSES Criminal Case No. SB-12-CRM-0174 as
to the petitioners GLORIA MACAPAGAL-
ARROYO and BENIGNO AGUAS for insufficiency of
evidence; ORDERS the immediate release from detention of said
petitioners; and MAKES no pronouncements on costs of suit.
SO ORDERED.[1]
On August 3, 2016, the State, through the Office of the
Ombudsman, has moved for the reconsideration of the decision,
submitting that:
I. THIS HONORABLE COURT'S GIVING DUE COURSE
TO A CERTIORARI ACTION ASSAILING AN
INTERLOCUTORY ORDER DENYING DEMURRER TO
EVIDENCE VIOLATES RULE 119, SECTION 23 OF
THE RULES OF COURT, WHICH PROVIDES THAT AN
ORDER DENYING THE DEMURRER TO EVIDENCE
SHALL NOT BE REVIEWABLE BY APPEAL OR BY
CERTIORARI BEFORE JUDGMENT.
II. THE HONORABLE COURT COMMITTED GRAVE
ERRORS WHICH AMOUNT TO A VIOLATION OR
DEPRIVATION OF THE STATE'S FUNDAMENTAL
RIGHT TO DUE PROCESS OF LAW.
A. THE DECISION
REQUIRES ADDITIONAL ELEMENTS IN THE
PROSECUTION Of
PLUNDER, VIZ. IDENTIFICATION OF THE
MAIN PLUNDERER AND PERSONAL BENEFIT
TO HIM/HER, BOTH OF WHICH ARE NOT
PROVIDED IN THE TEXT OF REPUBLIC ACT
(R.A.) NO. 7080.
B. THE EVIDENCE PRESENTED BY THE
PROSECUTION WAS NOT FULLY TAKEN INTO
ACCOUNT, INCLUDING BUT NOT LIMITED TO
THE IRREGULARITIES IN THE
 CONFIDENTIAL/INTELLIGENCE FUND (CIF)
DISBURSEMENT PROCESS, QUESTIONABLE
PRACTICE OF CO-MINGLING OF
FUNDS AND AGUAS' REPORTS TO THE
COMMISSION ON AUDIT (COA) THAT BULK OF
THE PHP365,997,915.00 WITHDRAWN FROM
THE PHILIPPINE CHARITY SWEEPSTAKES
OFFICE'S (PCSO) CIF WERE DIVERTED TO
THE ARROYO-HEADED OFFICE OF THE
PRESIDENT.
C. ARROYO AND AGUAS, BY INDISPENSABLE
COOPERATION, IN CONSPIRACY WITH THEIR
CO-ACCUSED IN SB-12-CRM-0174,
COMMITTED PLUNDER VIA A COMPLEX
ILLEGAL SCHEME WHICH DEFRAUDED PCSO
IN HUNDREDS OF MILLIONS OF PESOS.
D. EVEN ASSUMING THAT THE ELEMENTS OF
PLUNDER WERE NOT PROVEN BEYOND
REASONABLE DOUBT, THE EVIDENCE
PRESENTED BY THE PEOPLE SHOWS,
BEYOND REASONABLE DOUBT, THAT
ARROYO, AGUAS AND THEIR CO-ACCUSED IN
SB-12-CRM-0174 ARE GUILTY OF
MALVERSATION.[2]
In contrast, the petitioners submit that the decision has
effectively barred the consideration and granting of the motion
for reconsideration of the State because doing so would amount
to there prosecution or revival of the charge against them
despite their acquittal, and would thereby violate the
constitutional proscription against double jeopardy.
Petitioner Gloria M. Macapagal-Arroyo (Arroyo) points out that
the State miserably failed to prove the corpus delicti of plunder;
that the Court correctly required the identification of the main
plunderer as well as personal benefit on the part of the raider of
the public treasury to enable the successful prosecution of the
crime of plunder; that the State did not prove the conspiracy
that justified her inclusion in the charge; that to sustain the
case for malversation against her, in lieu of plunder, would
violate her right to be informed of the accusation against her
because the information did not necessarily include the crime of
malversation; and that even if the information did so, the
constitutional prohibition against double jeopardy already
barred the re-opening of the case for that purpose.
Petitioner Benigno B. Aguas echoes the contentions of Arroyo in
urging the Court to deny the motion for reconsideration.
In reply, the State avers that the prohibition against double
jeopardy does not apply because it was denied its day in court,
thereby rendering the decision void; that the Court should re-
examine the facts and pieces of evidence in order to find the
petitioners guilty as charged; and that the allegations of the
information sufficiently included all that was necessary to fully
inform the petitioners of the accusations against them.
Ruling of the Court
The Court DENIES the motion for reconsideration for its lack of
merit.
To start with, the State argues that the consolidated petitions
for certiorari were improper remedies in light of Section 23, Rule
119 of the Rules of Court expressly prohibiting the review of the
denial of their demurrer prior to the judgment in the case either
by appeal or by certiorari; that the Court has thereby limited its
own power, which should necessarily prevent the giving of due
course to the petitions for certiorari, as well as the undoing of
the order denying the petitioners' demurrer to evidence; that the
proper remedy under the Rules of Court was for the petitioners
to proceed to trial and to present their evidence-in-chief thereat;
and that even if there had been grave abuse of discretion
attending the denial, the Court's certiorari powers should be
exercised only upon the petitioners' compliance with the
stringent requirements of Rule 65, particularly with the
requirement that there be no plain, speedy or adequate remedy
in the ordinary course of law, which they did not establish.
Section 23, Rule 119 of the Rules of Court, pertinently provides:
Section 23. Demurrer to evidence. - x x x  guided by all the circumstances of each particular case 'as
xxxx
The order denying the motion for leave of court to file
demurrer to evidence or the demurrer itself shall not be
reviewable by appeal or by certiorari before judgment. (n)
The argument of the State, which is really a repetition of its
earlier submission, was squarely resolved in the decision, as
follows:
The Court holds that it should take cognizance of the petitions
for certiorari because the Sandiganbayan, as shall shortly be
demonstrated, gravely abused its discretion amounting to lack
or excess of jurisdiction.
The special civil action for certiorari is generally not proper to
assail such an interlocutory order issued by the trial court
because of the availability of another remedy in the ordinary
course of law. Moreover, Section 23, Rule 119 of the Rules of
Court expressly provides that "the order denying the motion for
leave of court to file demurrer to evidence or the demurrer itself
shall not be reviewable by appeal or by certiorari before
judgment." It is not an insuperable obstacle to this action,
however, that the denial of the demurrers to evidence of the
petitioners was an interlocutory order that did not terminate the
proceedings, and the proper recourse of the demurring accused
was to go to trial, and that in case of their conviction they may
then appeal the conviction, and assign the denial as among the
errors to be reviewed. Indeed, it is doctrinal that the situations
in which the writ of certiorari may issue should not be limited,
because to do so -
x x x would be to destroy its comprehensiveness and
usefulness. So wide is the discretion of the court that authority
is not wanting to show that certiorari is more discretionary than
either prohibition or mandamus. In the exercise of our
superintending control over other courts, we are to be
the ends of justice may require.' So it is that the writ will
be granted where necessary to prevent a substantial wrong
or to do substantial justice.
The Constitution itself has imposed upon the Court and the
other courts of justice the duty to correct errors of jurisdiction
as a result of capricious, arbitrary, whimsical and despotic
exercise of discretion by expressly incorporating in Section 1 of
Article VIII the following provision:
Section 1. The judicial power shall be vested in one Supreme
Court and in such lower courts as may be established by law.
Judicial power includes the duty of the courts of justice to settle
actual controversies involving rights which are legally
demandable and enforceable, and to determine whether or not
there has been a grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of any branch or
instrumentality of the Government.
The exercise of this power to correct grave abuse of
discretion amounting to lack or excess of jurisdiction on
the part of any branch or instrumentality of the
Government cannot be thwarted by rules of procedure to
the contrary or for the sake of the convenience of one side.
This is because the Court has the bounden constitutional
duty to strike down grave abuse of
discretion whenever and wherever it is committed. Thus,
notwithstanding the interlocutory character and effect of
the denial of the demurrers to evidence, the petitioners as
the accused could avail themselves of the remedy
of certiorari when the denial was tainted with grave abuse
of discretion. As we shall soon show, the Sandiganbayan as
the trial court was guilty of grave abuse of discretion when
it capriciously denied the demurrers to evidence despite
the absence of competent and sufficient evidence to sustain
the indictment for plunder, and despite the absence of the
factual bases to expect a guilty verdict.[3]
We reiterate the foregoing resolution, and stress that the
prohibition contained in Section 23, Rule 119 of the Rules of
Court is not an insuperable obstacle to the review by the Court
of the denial of the demurrer to evidence through certiorari. We
have had many rulings to that effect in the past. For instance,
in Nicolas v. Sandiganbayan,[4] the Court expressly ruled that
the petition for certiorari was the proper remedy to assail the
denial of the demurrer to evidence that was tainted with grave
abuse of discretion or excess of jurisdiction, or oppressive
exercise of judicial authority.
Secondly, the State submits that its right to due process was
violated because the decision imposed additional elements for
plunder that neither Republic Act No. 7080 nor jurisprudence
had theretofore required, i.e., the identification of the main
plunderer, and personal benefit on the part of the accused
committing the predicate crime of raid on the public treasury.
The State complains that it was not given the opportunity to
establish such additional elements; that the imposition of new
elements further amounted to judicial legislation in violation of
the doctrine of separation of powers; that the Court nitpicked
on the different infirmities of the information despite the issue
revolving only around the sufficiency of the evidence; and that it
established all the elements of plunder beyond reasonable
doubt.
The State cites the plain meaning rule to highlight that the
crime of plunder did not require personal benefit on the part of
the raider of the public treasury. It insists that the definition
of raids on the public treasury, conformably with the plain
meaning rule, is the taking of public money through fraudulent
or unlawful means, and such definition does not require
enjoyment or personal benefit on the part of plunderer or on the
part of any of his co-conspirators for them to be convicted for
plunder.
The submissions of the State are unfounded.
The requirements for the identification of the main plunderer
and for personal benefit in the predicate act of raids on the
public treasury have been written in R.A. No. 7080 itself as well
as embedded in pertinent jurisprudence. This we made clear in
the decision, as follows:
A perusal of the information suggests that what the Prosecution
sought to show was an implied conspiracy to commit plunder
among all of the accused on the basis of their collective actions
prior to, during and after the implied agreement. It is notable
that the Prosecution did not allege that the conspiracy among
all of the accused was by express agreement, or was a wheel
conspiracy or a chain conspiracy.
This was another fatal flaw of the Prosecution.
In its present version, under which the petitioners were
charged, Section 2 of Republic Act No. 7080 (Plunder Law)
states:
Section 2. Definition of the Crime of Plunder; Penalties. - Any
public officer who, by himself or in connivance with members of
his family, relatives by affinity or consanguinity, business
associates, subordinates or other persons, amasses,
accumulates or acquires ill-gotten wealth through a
combination or series of overt criminal acts as described in
Section 1(d) hereof in the aggregate amount or total value of at
least Fifty million pesos (P50,000,000.00) shall be guilty of the
crime of plunder and shall be punished by reclusion perpetua to
death. Any person who participated with the said public officer
in the commission of an offense contributing to the crime of
plunder shall likewise be punished for such offense. In the
imposition of penalties, the degree of participation and the
attendance of mitigating and extenuating circumstances, as
provided by the Revised Penal Code, shall be considered by the
court. The court shall declare any and all ill-gotten wealth and
their interests and other incomes and assets including the
properties and shares of stocks derived from the deposit or
investment thereof forfeited in favor of the State. [As Amended
by Section 12, Republic Act No. 7659 (The Death Penalty Law)]
Section 1(d) of Republic Act No. 7080 provides:
Section 1. Definition of terms. - As used in this Act, the term:
xxxx
d. "Ill-gotten wealth" means any asset, property, business
enterprise or material possession of any person within the
purview of Section two (2) hereof, acquired by him directly or
indirectly through dummies, nominees, agents, subordinates
and/or business associates by any combination or series of the
following means or similar schemes:
1. Through misappropriation, conversion, misuse, or
malversation of public funds or raids on the public treasury;
2. By receiving, directly or indirectly, any commission, gift,
share, percentage, kickbacks or any/or entity in connection
with any government contract or project or by reason of the
office or position of the public officer concerned;
3. By the illegal or fraudulent conveyance or disposition of
assets belonging to the National Government or any of its
subdivisions, agencies or instrumentalities or government
owned or controlled corporations and their subsidiaries;
4. By obtaining, receiving or accepting directly or indirectly any
shares of stock, equity or any other form of interest or
participation including the promise of future employment in any
business enterprise or undertaking;
5. By establishing agricultural, industrial or commercial
monopolies or other combinations and/or implementation of
decrees and orders intended to benefit particular persons or
special interests; or
6. By taking undue advantage of official position, authority,
relationship, connection or influence to unjustly enrich himself
or themselves at the expense and to the damage and prejudice
of the Filipino people and the Republic of the Philippines.
The law on plunder requires that a particular public officer
must be identified as the one who amassed, acquired or
accumulated ill-gotten wealth because it plainly states that
plunder is committed by any public officer who, by himself
or in connivance with members of his family, relatives by
affinity or consanguinity, business associates, subordinates
or other persons, amasses, accumulates or acquires ill
gotten wealth in the aggregate amount or total value of at
least P50,000,000.00 through a combination or series of
overt criminal acts us described in Section 1(d) hereof.
Surely, the law requires in the criminal charge for plunder
against several individuals that there must be a main
plunderer and her co-conspirators, who may be members of
her family, relatives by affinity or consanguinity, business
associates, subordinates or other persons. In other words,
the allegation of the wheel conspiracy or express
conspiracy in the information was appropriate because the
main plunderer would then be identified in either manner.
Of course, implied conspiracy could also identify the main
plunderer, but that fact must be properly alleged and duly
proven by the Prosecution.

This interpretation is supported by Estrada v. Sandiganbayan,
where the Court explained the nature of the conspiracy charge
and the necessity for the main plunderer for whose benefit the
amassment, accumulation and acquisition was made, thus:
There is no denying the fact that the "plunder of an entire
nation resulting in material damage to the national economy" is
made up of a complex and manifold network of crimes. In the
crime of plunder, therefore, different parties may be united by a
common purpose. In the case at bar, the different accused and
their different criminal acts have a commonality - to help the
former President amass, accumulate or acquire ill-gotten
wealth. Sub-paragraphs (a) to (d) in the Amended Information
alleged the different participation of each accused in the
conspiracy. The gravamen of the conspiracy charge,
therefore, is not that each accused agreed to receive protection
money from illegal gambling, that each misappropriated a
portion of the tobacco excise tax, that each accused ordered the
GSIS and SSS to purchase shares of Belle Corporation and
receive commissions from such sale, nor that each unjustly
enriched himself from commissions, gifts and kickbacks; rather,
it is that each of them, by their individual acts, agreed to
participate, directly or indirectly, in the amassing,
accumulation and acquisition of ill-gotten wealth of
and/or for former President Estrada.[5] [bold underscoring
supplied for emphasis]
Indeed, because plunder is a crime that only a public official
can commit by amassing, accumulating, or acquiring ill-gotten
wealth in the aggregate amount or total value of at least
P50,000,000.00, the identification in the information of such
public official as the main plunderer among the several
individuals thus charged is logically necessary under the law
itself. In particular reference to Criminal Case No. SB-12-CRM-
0174, the individuals charged therein - including the petitioners
were 10 public officials; hence, it was only proper to identify the
main plunderer or plunderers among the 10 accused who
herself or himself had amassed, accumulated, or acquired ill-
gotten wealth with the total value of at least P50,000,000.00.
The phrase raids on the public treasury as used in Section 1(d)
of R. A. No. 7080 is itself ambiguous. In order to ascertain the
objective meaning of the phrase, the act of raiding the public
treasury cannot be divided into parts. This is to differentiate the
predicate act of raids on the public treasury from other offenses
involving property, like robbery, theft, or estafa. Considering
that R.A. No. 7080 does not expressly define this predicate act,
the Court has necessarily resorted to statutory construction. In
so doing, the Court did not adopt the State's submission that
personal benefit on the part of the accused need not be alleged
and shown because doing so would have defeated the clear
intent of the law itself,[6] which was to punish the amassing,
accumulating, or acquiring of ill-gotten wealth in the aggregate
amount or total value of at least P50,000,000.00 by any
combination or series of acts of misappropriation, conversion,
misuse, or malversation of public funds or raids on the public
treasury.
As the decision has observed, the rules of statutory
construction as well as the deliberations of Congress indicated
the intent of Congress to require personal benefit for the
predicate act of raids on the public treasury, viz.:
The phrase raids on the public treasury is found in Section 1(d)
of R.A. No. 7080, which provides:
Section 1. Definition of Terms. - x x x
xxxx
d) Ill-gotten wealth means any asset, property, business
enterprise or material possession of any person within the
purview of Section Two (2) hereof, acquired by him directly or
indirectly through dummies, nominees, agents, subordinates
and/or business associates by any combination or series of the
following means or similar schemes:
1) Through misappropriation, conversion, misuse, or
malversation of public funds or raids on the public treasury;
xxxx
To discern the proper import of the phrase raids on the
public treasury, the key is to look at the accompanying
words: misappropriation, conversion,
misuse or malversation of public funds. This process is
conformable with the maxim of statutory
construction noscitur a sociis, by which the correct
construction of a particular word or phrase that is
ambiguous in itself or is equally susceptible of various
meanings may be made by considering the company of the
words in which the word or phrase is found or with which it
is associated. Verily, a word or phrase in a statute is always
used in association with other words or phrases, and its
meaning may, therefore, be modified or restricted by the
latter.
To convert connotes the act of using or disposing of
another's property as if it were one's own; to
misappropriate means to own, to take something for one's
own benefit; misuse means "a good, substance, privilege, or
right used improperly, unforeseeably, or not as intended;"
and malversation occurs when "any public officer who, by
reason of the duties of his office, is accountable for public
funds or property, shall appropriate the same or shall take
or misappropriate or shall consent, through abandonment
or negligence, shall permit any other person to take such
public funds, or property, wholly or partially." The common
thread that binds all the four terms together is that the
public officer used the property taken. Considering
that raids on the public treasury is in the company of the
four other terms that require the use of the property taken,
the phrase raids on the public treasury similarly requires
such use of the property taken. Accordingly,
the Sandiganbayan gravely erred in contending that the
mere accumulation and gathering constituted the forbidden
act of raids on the public treasury. Pursuant to the maxim
of noscitur a sociis, raids on the public treasury requires
the raider to use the property taken impliedly for his
personal benefit.[7]
The Prosecution asserts that the Senate deliberations
removed personal benefit as a requirement for plunder. In not
requiring personal benefit, the Sandiganbayan quoted the
following exchanges between Senator Enrile and Senator
Tañada, viz.:
Senator Enrile. The word here, Mr. President, "such public
officer or person who conspired or knowingly benefited". One
does not have to conspire or rescheme. The only element
needed is that he "knowingly benefited". A candidate for the
Senate for instance, who received a political contribution from a
plunderer, knowing that the contributor is a plunderer and
therefore, he knowingly benefited from the plunder, would he
also suffer the penalty, Mr. President, for life imprisonment?
Senator Tañada. In the committee amendments, Mr. President,
we have deleted these lines 1 to 4 and part of line 5, on page 3.
But, in a way, Mr. President, it is good that the Gentleman is
bringing out these questions, I believe that under the examples
he has given, the Court will have to...
Senator Enrile. How about the wife, Mr. President, he may not
agree with the plunderer to plunder the country but because
she is a dutiful wife or a faithful husband, she has to keep her
or his vow of fidelity to the spouse. And, of course, she enjoys
the benefits out of the plunder. Would the Gentleman now
impute to her or him the crime of plunder simply because she
or he knowingly benefited out of the fruits of the plunder and,
therefore, he must suffer or he must suffer the penalty of life
imprisonment?
The President. That was stricken out already in the Committee
amendment.
Senator Tañada. Yes, Mr. President. Lines 1 to 4 and part of line
5 were stricken out in the Committee amendment. But, as I
said, the examples of the Minority Floor Leader are still worth
spreading the Record. And, I believe that in those examples, the
Court will have just to take into consideration all the other
circumstances prevailing in the case and the evidence that will
be submitted.
The President. In any event, 'knowingly benefited' has already
been stricken off.
The exchanges between Senator Enrile and Senator Tañada
reveal, therefore, that what was removed from the coverage of
the bill and the final version that eventually became the law was
a person who was not the main plunderer or a co-conspirator,
but one who personally benefited from the plunderers' action.
The requirement of personal benefit on the part of the main
plunderer or his co-conspirators by virtue of their plunder was
not removed.
As a result, not only did the Prosecution fail to show where the
money went but, more importantly, that GMA and Aguas had
personally benefited from the same. Hence, the Prosecution did
not prove the predicate act of raids on the public
treasury beyond reasonable doubt.[8]
Thirdly, the State contends that the Court did not appreciate
the totality of its evidence, particularly the different
irregularities committed in the disbursement of the PCSO
funds, i.e., the commingling of funds, the non-compliance with
LOI No. 1282, and the unilateral approval of the disbursements.
Such totality, coupled with the fact of the petitioners'
indispensable cooperation in the pilfering of public funds,
showed the existence of the conspiracy to commit plunder
among all of the accused.
The contention lacks basis.
As can be readily seen from the decision, the Court expressly
granted the petitioners' respective demurrers to evidence and
dismissed the plunder case against them for insufficiency of
evidence because:
x x x the Sandiganbayan as the trial court was guilty of grave
abuse of discretion when it capriciously denied the demurrers
to evidence despite the absence of competent and sufficient
evidence to sustain the indictment for plunder, and despite
the absence of the factual bases to expect a guilty verdict.[9]
Such disposition of the Court fully took into
consideration all the evidence adduced against the petitioners.
We need not rehash our review of the evidence thus adduced,
for it is enough simply to stress that the Prosecution failed to
establish the corpus delicti of plunder - that any or all of the
accused public officials, particularly petitioner Arroyo, had
amassed, accumulated, or acquired ill-gotten wealth in the
aggregate amount or total value of at least P50,000,000.00.
Fourthly, in accenting certain inadequacies of the allegations of
the information, the Court did not engage in purposeless
nitpicking, and did not digress from the primary task of
determining the sufficiency of the evidence presented by the
State against the petitioners. What the Court thereby intended
to achieve was to highlight what would have been relevant in
the proper prosecution of plunder and thus enable itself to
discern and determine whether the evidence of guilt was
sufficient or not. In fact, the Court categorically clarified that in
discussing the essential need for the identification of the main
plunderer it was not harping on the sufficiency of the
information, but was only enabling itself to search for and to
find the relevant proof that unequivocally showed petitioner
Arroyo as the "mastermind" - which was how the
Sandiganbayan had characterized her participation in the
context of the implied conspiracy alleged in the information. But
the search came to naught, for the information contained
nothing that averred her commission of the overt act necessary
to implicate her in the supposed conspiracy to commit the
crime of plunder. Indeed, the Court assiduously searched for
but did not find the sufficient incriminatory evidence against
the petitioners. Hence, the Sandiganbayan capriciously and
oppressively denied their demurrers to evidence.
Fifthly, the State posits that it established at least a case for
malversation against the petitioners.
Malversation is defined and punished under Article 217 of
the Revised Penal Code, which reads thusly:
Article 217. Malversation of public funds or property;
Presumption of malversation. - Any public officer who, by reason
of the duties of his office, is accountable for public funds or
property, shall appropriate the same or shall take or
misappropriate or shall consent, through abandonment or
negligence, shall permit any other person to take such public
funds, or property, wholly or partially, or shall otherwise be
guilty of the misappropriation or malversation of such funds or
property, shall suffer:
1. The penalty of prison correccional in its medium and
maximum periods, if the amount involved in the
misappropriation or malversation does not exceed two hundred
pesos.
2. The penalty of prision mayor in its minimum and medium
periods, if the amount involved is more than two hundred pesos
but does not exceed six thousand pesos.
3. The penalty of prision mayor in its maximum period
to reclusion temporal in its minimum period, if the amount
involved is more than six thousand pesos but is less than
twelve thousand pesos.
4. The penalty of reclusion temporal, in its medium and
maximum periods, if the amount involved is more than twelve
thousand pesos but is less than twenty-two thousand pesos. If
the amount exceeds the latter, the penalty shall be reclusion
temporal in its maximum period to reclusion perpetua.
In all cases, persons guilty of malversation shall also suffer the
penalty of perpetual special disqualification and a fine equal to
the amount of the funds malversed or equal to the total value of
the property embezzled.
The failure of a public officer to have duly forthcoming any
public funds or property with which he is chargeable, upon
demand by any duly authorized officer, shall be prima
facie evidence that he has put such missing funds or property
to personal use. (As amended by RA 1060).
The elements of malversation are that: (a) the offender is an
accountable public officer; (b) he/she is responsible for the
misappropriation of public funds or property through intent or
negligence; and (c) he/she has custody of and received such
funds and property by reason of his/her office.[10]
The information in Criminal Case No. SB-12-CRM-
0174[11] avers:
The undersigned Assistant Ombudsman and Graft Investigation
and Prosecution Officer III, Office of the Ombudsman, hereby
accuse GLORIA MACAPAGAL-ARROYO, ROSARIO C.
URIARTE, SERGIO O. VALENCIA, MANUEL L. MORATO,
JOSE R. TARUC V, RAYMUNDO T. ROQUERO, MA.
FATIMA A.S. VALDES, BENIGNO B. AGUAS, REYNALDO
A. VILLAR and NILDA B. PLARAS, of the crime of
PLUNDER, as defined by, and penalized under Section 2 of
Republic Act (R.A.) No. 7080, as amended by R.A. No. 7659,
committed, as follows:
That during the period from January 2008 to June 2010 or
sometime prior or subsequent thereto, in Quezon City,
Philippines, and within the jurisdiction of this Honorable Court,
accused GLORIA MACAPAGAL-ARROYO, then the President
of the Philippines, ROSARIO C. URIARTE, then General
Manager and Vice Chairman, SERGIO O. VALENCIA, then
Chairman of the Board of Directors, MANUEL L. MORATO,
JOSE R. TARUC V, RAYMUNDO T. ROQUERO, MA.
FATIMA A.S. VALDES, then members of the Board of
Directors, BENIGNO B. AGUAS, then Budget and Accounts
Manager, all of the Philippine Charity Sweepstakes Office
(PCSO), REYNALDO A. VILLAR, then Chairman, and NILDA
B. PLARAS, then Head of Intelligence/Confidential Fund Fraud
Audit Unit, both of the Commission on Audit, all public officers
committing the offense in relation to their respective offices and
taking undue advantage of their respective official positions,
authority, relationships, connections or influence, conniving,
conspiring and confederating with one another, did then and
there willfully, unlawfully and criminally amass, accumulate
and/or acquire directly or indirectly, ill-gotten wealth in the
aggregate amount or total value of THREE HUNDRED SIXTY
FIVE MILLION NINE HUNDRED NINETY SEVEN
THOUSAND NINE HUNDRED FIFTEEN PESOS
(PHP365,997,915.00), more or less, through any or a
combination or a series of overt or criminal acts, or similar
schemes or means; described as follows:
(a) diverting in several instances, funds from the operating
budget of PCSO to its Confidential/Intelligence Fund that
could be accessed and withdrawn at any time with minimal
restrictions, and converting, misusing, and/or illegally
conveying or transferring the proceeds drawn from said fund
in the aforementioned sum, also in several instances, to
themselves, in the guise of fictitious expenditures, for their
personal gain and benefit;
(b) raiding the public treasury by withdrawing and receiving in
several instances, the above-mentioned amount from the
Confidential/Intelligence Fund from PCSO's accounts, and
or unlawfully transferring or conveying the same into their
possession and control through irregularly issued
disbursement vouchers and fictitious expenditures; and
(c) taking advantage of their respective official positions,
authority, relationships, connections or influence, in several
instances, to unjustly enrich themselves in the
aforementioned sum, at the expense of, and the damage and
prejudice of the Filipino people and the Republic of the
Philippines.
CONTRARY TO LAW.
In thereby averring the predicate act of malversation, the State
did not sufficiently allege the aforementioned essential elements
of malversation in the information. The omission from the
information of factual details descriptive of the aforementioned
elements of malversation highlighted the insufficiency of the
allegations. Consequently, the State's position is entirely
unfounded.
Lastly, the petitioners insist that the consideration and granting
of the motion for reconsideration of the State can amount to a
violation of the constitutional prohibition against double
jeopardy because their acquittal under the decision was a prior
jeopardy within the context of Section 21, Article III (Bill of
Rights) of the 1987 Constitution, to wit:
Section 21. No person shall be twice put in jeopardy of
punishment for the same offense. If an act is punished by a law
and an ordinance, conviction or acquittal under either shall
constitute a bar to another prosecution for the same act.
The insistence of the petitioners is fully warranted. Indeed, the
consideration and granting of the motion for reconsideration of
the State will amount to the violation of the constitutional
guarantee against double jeopardy.
The Court's consequential dismissal of Criminal Case No. SB-
12-CRM-0174 as to the petitioners for insufficiency of
evidence amounted to their acquittal of the crime of plunder
charged against them. In People v. Tan,[12] the Court shows why:
In People v. Sandiganbayan, this Court explained the general
rule that the grant of a demurrer to evidence operates as an
acquittal and is, thus, final and unappealable, to wit:
The demurrer to evidence in criminal cases, such as the
one at bar, is "filed after the prosecution had rested its
case," and when the same is granted, it calls "for an
appreciation of the evidence adduced by the prosecution
and its sufficiency to warrant conviction beyond reasonable
doubt, resulting in a dismissal of file case on the merits,
tantamount to an acquittal of the accused." Such dismissal
of a criminal case by the grant of demurrer to evidence may
not be appealed, for to do so would be to place the accused
in double jeopardy. The verdict being one of acquittal, the
case ends there.
xxxx
The rule on double jeopardy, however, is not without
exceptions. In People v. Laguio, Jr., this Court stated that the
only instance when double jeopardy will not attach is when the
RTC acted with grave abuse of discretion, thus:
... The only instance when double jeopardy will not attach
is when the trial court acted with grave abuse of discretion
amounting to lack or excess of jurisdiction, such as where
the prosecution was denied the opportunity to present its
case or where the trial was a sham. However,
while certiorari may be availed of to correct an erroneous
acquittal, the petitioner in such an extraordinary proceeding
must clearly demonstrate that the trial court blatantly abused
its authority to a point so grave as to deprive it of its very power
to dispense justice.[13]
The constitutional prohibition against placing a person under
double jeopardy for the same offense bars not only a new and
independent prosecution but also an appeal in the same action
after jeopardy had attached.[14] As such, every acquittal becomes
final immediately upon promulgation and cannot be recalled for
correction or amendment. With the acquittal being immediately
final, granting the State's motion for reconsideration in this
case would violate the Constitutional prohibition against double
jeopardy because it would effectively reopen the prosecution
and subject the petitioners to a second jeopardy despite their
acquittal.
It is cogent to remind in this regard that the Constitutional
prohibition against double jeopardy provides to the accused
three related protections, specifically: protection against a
second prosecution for the same offense after acquittal;
protection against a second prosecution for the same offense
after conviction; and protection against multiple punishments for
the same offense.[15] The rationale for the three protections is
expounded in United States v. Wilson:[16]
The interests underlying these three protections are quite
similar. When a defendant has been once convicted and
punished for a particular crime, principles of fairness and
finality require that he not be subjected to the possibility of
further punishment by being again tried or sentenced for
the same offense. Ex parte Lange, 18 Wall 163 (1874); In re NOTICE OF JUDGMENT
Nielsen, 131 U.S. 176 (1889). When a defendant has been
acquitted of an offense, the Clause guarantees that the Sirs/Mesdames:
State shall not be permitted to make repeated attempts to
convict him, Please take notice that on April 18, 2017 a Decision/Resolution,
"thereby subjecting him to embarrassment, expense and copy attached herewith, was rendered by the Supreme Court in
ordeal, and compelling him to live in a continuing state of
anxiety and insecurity, as well as enhancing the possibility
the above-entitled cases, the original of which was received by
that, even though innocent, he may be found guilty." this Office on May 19, 2017 at 9:25 a.m.
Green v. United States, 355 U.S. 184, 187-188 (1957).
The policy of avoiding multiple trials has been regarded as Very truly
so important that exceptions to the principle have been yours,
only grudgingly allowed. Initially, a new trial was thought to
be unavailable after appeal, whether requested by the (SGD)
prosecution or the defendant. See United States v. Gibert, 25 FELIPA G.
F. Cas. 1287 (No. 15,204) (CCD Mass. 1834) (Story, J.). It was BORLONGAN-
not until 1896 that it was made clear that a defendant ANAMA
could seek a new trial after conviction, even though the   Clerk of Court
Government enjoyed no similar right. United States v. Ball,
163 U.S. 662. (Bold underscoring supplied for emphasis)
WHEREFORE, the Court DENIES the motion for
[1]
 Rollo (G.R. No. 220953), Vol. III, p. 1866.
reconsideration for lack of merit.
[2]
 Rollo (G.R. No. 220598), Vol. VI, pp. 4158-4159.
SO ORDERED.
 Rollo (G.R. No. 220953), Vol. III, pp. 1846-1847; bold
[3]

Sereno, C. J., I join J. Leonen's Dissent. underscoring is supplied for emphasis.

Velasco, Jr., Leonardo-De Castro, Peralta, Del Castillo, Mendoza,
Reyes, Jardeleza, Martires, and Tijam, JJ., concur.  G.R. Nos. 175930-31, February 11, 2008, 544 SCRA 324,
[4]

Carpio, J., I join J. Leonen's Dissent. 336.

Perlas-Bernabe, J., Please see Concurring and Dissenting
Opinion in the main case.
[5]
 Rollo (G.R. No. 220593), Vol. III, pp. 1851-1854.
Leonen, J., I dissent. See Separate Opinion.
Caguioa, J., I join the Dissent of J. Leonen.  See Garcia v. Social Security Commission Legal and Collection,
[6]

G.R. No. 170735, December 17, 2007, 540 SCRA 456, 472.
[7]
 Bold underscoring is added for emphasis. encroaching on Congress' plenary power to make laws. It also
denies the State the opportunity to adequately present its case.
[8]
 Rollo (G.R. No. 220953), Vol. III, pp. 1863-1865. Likewise, it unwittingly licenses the most cunning plunderers to
prey upon public funds with impunity.
[9]
 Id. at 1847.
This is not what the Anti-Plunder Law intends.
 Regalado, Criminal Law Conspectus, 1st Edition, 2000,
[10]

National Book Store, Inc., p. 424. I

[11]
 Rollo (G.R. No. 220598), Vol. I, pp. 305-307-A. Republic Act No. 7080 or the Anti-Plunder Law was adopted in
the wake of the Marcos dictatorship, when the pilferage of the
[12]
 G.R. No. 167526, July 26, 2010, 625 SCRA 388. country's wealth by former President Ferdinand E. Marcos, his
wife Imelda, their family and cronies bled the Philippine
[13]
 Id. at 395-397 (bold underscoring supplied for emphasis). economy dry.[2] The terms "kleptocracy," "plunder," and
"government by thievery" populated political discourse during
 Republic v. Court of Appeals, No. L-41115, September 11,
[14]
Marcos' rule.[3] Their ravaging is confirmed in
1982, 116 SCRA 505, 556; People v. Pomeroy, 97 Phil 927 jurisprudence. Republic v. Sandiganbayan[4] professes the
(1955); People v. Bringas, 70 Phil 528; People v. Yelo, 83 Phil. Marcos' regime's looting of at least US$650 million (as of
618. January 31, 2002) worth of government funds.
[15]
 North Carolina v. Pearce, 395 US 711, 717 (1969). After the 1986 People Power Revolution, former Senate
President Jovito Salonga lamented that laws already in force,
[16]
 420 US 332, 343 (1975). such as Republic Act No. 3019 - the Anti-Graft and Corrupt
Practices Act "were clearly inadequate to cope with the
magnitude of the corruption and thievery committed during the
Marcos years."[5] Thus, he filed in the Senate a bill to address
DISSENTING OPINION large-scale larceny of public resources the anti-plunder bill.
Then Representative Lorna Yap filed a counterpart bill in the
LEONEN, J: House of Representatives.[6]

I maintain my dissent.
This Court's July 19, 2016 Decision[1] sets a dangerous
precedent. It effectively requires new elements to the crime of
plunder that are not sustained by the text of the Anti-Plunder
Law. In doing so, this Court sets itself upon the course of
The Explanatory Note to Senate Bill No. 733 stated:
The acts and/or omissions sought to be penalized... constitute
plunder of an entire nation resulting in material damage to the
national economy[, which] does not yet exist in Philippine
statute books. Thus, the need to come up with a legislation as a
safeguard against the possible recurrence of the depravities of
the previous regime and as a deterrent to those with similar
inclination to succumb to the corrupting influence of power.
[7]
 (Emphasis supplied)
Senate Bill No. 733 and House Bill No. 22752 were consolidated
into Republic Act No. 7080,[8] which President Corazon Aquino
signed on July 12, 1991.[9]
II
Republic Act No. 7080, as amended by Republic Act No. 7659,
defines plunder as follows:
Section 2. Definition of the Crime of Plunder; Penalties. -
Any public officer who, by himself or in connivance with
members of his family, relatives by affinity or consanguinity,
business associates, subordinates or other persons, amasses,
accumulates or acquires ill-gotten wealth through a combination
or series of overt or criminal acts as described in Section 1(d)
hereof, in the aggregate amount or total value of at least Fifty
million pesos (P50,000,000.00), shall be guilty of the crime of
plunder and shall be punished by life imprisonment with
perpetual absolute disqualification from holding any public
office. Any person who participated with said public officer in
the commission of plunder shall likewise be punished. In the
imposition of penalties, the degree of participation and the
attendance of mitigating and extenuating circumstances shall
be considered by the court. The court shall declare any and all
ill-gotten wealth and their interests and other incomes and
assets including the properties and shares of stock derived from
the deposit or investment thereof forfeited in favor of the State.
(Emphasis supplied)
This statutory definition may be divided into three (3) main
parts.
The first part identifies the persons who may be liable for
plunder and the central acts around which plunder revolves. It
penalizes "[a]ny public officer who, by himself or in connivance
with members of his family, relatives... or other persons,
amasses, accumulates or acquires ill-gotten wealth[.]"
The law only requires a showing that a person holds public
office. He or she may act alone or in conspiracy with others.
Thus, the Anti-Plunder Law explicitly recognizes that plunder
may be committed collectively "in connivance with" others. In
doing so, it makes no distinction between the conspirators.
Glaringly absent is any mention of a so-called "main plunderer"
or specific "personal benefit" gained by any confederate to the
crime.
It is also silent on the manner by which conspirators organized
themselves, or otherwise went about committing the offense.
Thus, there is no need to show that plunder is centralized. All
that Section 2 requires is proof that the accused acted out of a
common design to amass, accumulate, or acquire ill-gotten
wealth.
The second part specifies the means through which plunder is
committed, that is, "through a combination or series of overt or
criminal acts as described in Section 1(d) of Republic Act No.
7080."
"Combination," as used in Section 2 of the Anti-Plunder Law,
was explained in Estrada vs. Sandiganbayan[10] to refer to "at
least any two different predicate acts in any of said items" in
Section 1(d).[11] "Series" was explained as synonymous to "on
several instances"[12] or a "repetition of the same predicate act in
any of the items in Section 1(d) of the law."[13]
The "overt or criminal acts described in Section 1(d)" are the
following:
a. Misappropriating, converting, misusing, or malversing
public funds; or raiding on the public treasury;
 b. Receiving any commission or kickbacks from a
government contract or project, or by reason of one's
office or position;
c. Fraudulently disposing government assets;
d. Obtaining any interest or participating in any business
undertaking;
e. Establishing monopolies or implementing decrees that
benefit particular persons or interests; and
f. Taking undue advantage of one's official position or
influence to enrich oneself at the expense of the People
and the Republic.
Like Section 2, Section 1(d) does not speak of any "main
plunderer" or any "personal benefit" obtained. In defining "ill-
gotten wealth," it merely speaks of acquisitions made through a
"combination or series" of any, some, or all of the six (6)
identified schemes. Thus, for example, two (2) instances of
raiding on the public treasury suffice to sustain a finding of
plunder.
As I noted in my dissent to the majority's July 19, 2016
Decision:[14]
Section 2 does not require plunder to be centralized, whether in
terms of its planning and execution, or in terms of its benefits.
All it requires is for the offenders to act out of a common design
to amass, accumulate, or acquire ill-gotten wealth, such that
the aggregate amount obtained is at least P50,000,000.00.[15]
The third part specifies the threshold amount for plunder. It
must be "in the aggregate amount or total value of at least Fifty
million pesos (P50,000,000.00)[.]" The law speaks of an
"aggregate amount." It also uses the term, "total value," to
highlight how the amount must be counted in its whole and not
severed into parts. How this Court has replaced the statutory
requirement of "aggregate amount" or "total value" to mere
"aliquot" shares[16] is bewildering.
It is not for this Court to repeal or modify statutes in the guise
of merely construing them. Our power to interpret law does not
encompass the power to add to or cancel the statutorily
prescribed elements of offenses.
III
The most recent jurisprudence on plunder prior to this case
is Enrile v. People.[17] Promulgated on August 15,
2015, Enrile specifies the elements of plunder under Republic
Act No. 7080, as follows:
[T]he elements of plunder are:
(1) That the offender is a  public officer who acts by
himself or in connivance with members of his family,
relatives by affinity or consanguinity, business
associates, subordinates, or other persons;
(2) That he amassed, accumulated or acquired ill-gotten
wealth  through a combination or series of the
following overt or criminal acts:
a. through misappropriation, conversion, misuse, or
malversation of public funds or raids on the public
treasury;
b. by receiving, directly or indirectly, any commission, gift,
share, percentage, kickback or any other form of
pecuniary benefits from any person and/or entity in
connection with any government contract or project or by
reason of the office or position of the public officer;
c. by the illegal or fraudulent conveyance or disposition of
assets belonging to the National Government or any of its
subdivisions, agencies or instrumentalities of
Government owned or -controlled corporations or their
subsidiaries;
d. by obtaining, receiving or accepting directly or indirectly
 any shares of stock, equity or any other form of interest
or participation including the promise of future
employment in any business enterprise or undertaking;
e. by establishing agricultural, industrial or commercial
monopolies or other combinations and/or
implementation of decrees and orders intended to benefit
particular persons or special interests; or
f. by taking advantage of official position, authority,
relationship, connection or influence to unjustly enrich
himself or themselves at the expense and to the damage
and prejudice of the Filipino people and the Republic of
the Philippines; and,
(3) That the aggregate amount or total value of the ill-gotten
wealth amassed, accumulated or acquired is at least
P50,000,000.00.[18] (Emphasis in the original)
Enrile is faithful to the text of the Anti-Plunder Law. It makes no
reference to a "main plunderer" or to "personal benefit." The
prosecution and the Sandiganbayan were correct to rely on this
recital of elements in the course of the proceedings that
culminated in the Sandiganbayan's assailed September 10,
2015 Resolution.
The Office of the Ombudsman laments that this Court has
effectively increased the elements required for conviction.
[19]
 Coming at the heels of our definitive pronouncements
in Enrile, the prosecution was caught by surprise.[20]
The majority's July 19, 2016 Decision states:
The law on plunder requires that a particular public officer
must be identified as the one who amassed, acquired or
accumulated ill-gotten wealth because it plainly states that
plunder is committed by any public officer who, by himself or in
connivance with members of his family, relatives by affinity or
consanguinity, business associates, subordinates or other
persons, amasses, accumulates or acquires ill-gotten wealth in
the aggregate amount or total value of at least P50,000,000.00
through a combination or series of overt criminal acts as
described in Section 1(d) hereof. Surely, the law requires in the
criminal charge for plunder against several individuals that there
must be a main plunderer and her co-conspirators, who may be
members of her family, relatives by affinity or consanguinity,
business associates, subordinates or other persons. In other
words, the allegation of the wheel conspiracy or express
conspiracy in the information was appropriate because the
main plunderer would then be identified in either manner...[21]
(Emphasis and underscoring supplied)
The July 19, 2016 Decision proceeds to cite the 2002 Decision
in Estrada v. Sandiganbayan[22] (2002 Estrada case) in support
of the supposed need for a specification of a "main plunderer"
and of "personal benefit":
This interpretation is supported by [Jose "Jinggoy"] Estrada v.
Sandiganbayan, where the Court explained the nature of the
conspiracy charge and the necessity for the main plunderer for
whose benefit the amassment, accumulation and acquisition
was made, thus:
There is no denying the fact that the "plunder of an entire
nation resulting in material damage to the national economy" is
made up of a complex and manifold network of crimes. In the
crime of plunder, therefore, different parties may be united by a
common purpose. In the case at bar, the different accused and
their different criminal acts have a commonality - to help the
former President amass, accumulate or acquire ill-gotten
wealth. Sub-paragraphs (a) to (d) in the Amended Information
alleged the different participation of each accused in the
conspiracy. The gravamen of the conspiracy charge,
therefore, is not that each accused agreed to receive protection
money from illegal gambling, that each misappropriated a
portion of the tobacco excise tax, that each accused ordered the
GSIS and SSS to purchase shares of Belle Corporation and
receive commissions from such sale, nor that each unjustly
enriched himself from commissions, gifts and kickbacks; rather,
it is that each of them, by their individual acts, agreed to
participate, directly or indirectly, in the amassing,
accumulation and acquisition of ill-gotten wealth of
and/or for former President Estrada.[23] (Emphasis and
underscoring in the original)
The majority's sweeping reliance[24] on the 2002 Estrada case is
misplaced. It fails to account for nuances that engendered the
pronouncements made in Estrada.
The 2002 Estrada[25] case referred to one (1) of five (5) cases filed
against former President Joseph Ejercito Estrada, his family,
and associates. It explicitly acknowledged that the five (5)
criminal complaints were "an offshoot of the impeachment
proceedings against [former President] Estrada."[26]
More specifically, the 2002 Estrada case involved a separate
charge of plunder against President Estrada's son, Jose
"Jinggoy" Estrada. Thus, it became necessary to state in the
information that Jinggoy Estrada engaged in a conspiracy with
his father.[27] That case needed to specifically establish the
conspiracy linkage between former President Estrada and
Jinggoy Estrada:
From a reading of the Amended Information, the case at bar
appears similar to a "wheel" conspiracy. The hub is former
President Estrada while the spokes are all the accused [Jose
"Jinggoy" Estrada, et al.], and the rim that encloses the spokes
is the common goal in the overall conspiracy, i.e., the amassing,
accumulation and acquisition of ill-gotten wealth.[28]
Notwithstanding these nuances in the 2002 Estrada case, it
remains that, in a conspiracy:
[T]he act of one is the act of all the conspirators, and a
conspirator may be held as a principal even if he did not
participate in the actual commission of every act constituting
the offense. In conspiracy, all those who in one way or another
helped and cooperated in the consummation of the crime are
considered co-principals since the degree or character of the
individual participation of each conspirator in the commission
of the crime becomes immaterial.[29]
There is no need to identify a "main conspirator" and a "co-
conspirator." For the accused to be found liable as a co-
principal, prosecution must only show:
[A]n overt act in furtherance of the conspiracy, either by actively
participating in the actual commission of the crime, or by
lending moral assistance to his co-conspirators by being
present at the scene of the crime, or by exerting moral
ascendancy over the rest of the conspirators as to move them to
executing the conspiracy.[30]
Unlike in the 2002 Estrada case, all of the accused here are
charged in the same information; not in five (5) separate
informations that were explicit "offshoots of the impeachment
proceedings against former President Estrada."[31]
The present case is more akin to that involved in the
2015 Enrile Decision. There, the accused public officer, Senator
Juan Ponce Enrile, along with his Chief of Staff, Jessica Lucila
G. Reyes, as well as Janet Lim Napoles, Ronald John Lim, and
John Raymund de Asis were charged in the same information
with conspiring to commit plunder. Enrile never required the
identification of a "main plunderer" or the showing of any
"personal benefit" obtained. It is the more appropriate
benchmark for this case.
IV
The July 19, 2016 Decision's requirement of a specification of a
"main plunderer" and of "personal benefit," which was imposed
only after the prosecution presented its case before the
Sandiganbayan, makes it necessary for the prosecution to, at
least, be given an opportunity to address this novel
requirement. Otherwise, the prosecution shall have been
deprived of due process to adequately ventilate its case. Thus, a
favorable action on the prosecution's Motion for
Reconsideration is not a violation of petitioners' right against
double jeopardy.
Section 9 of Rule 117 of the Revised Rules on Criminal
Procedure[32] identifies three (3) elements of double jeopardy: (1)
a first jeopardy must have attached prior to the second; (2) the
first jeopardy must have been validly terminated; and, (3) a
second jeopardy must be for the same offense as that in the
first.
Legal jeopardy attaches only (a) upon a valid indictment, (b)
before a competent court, (c) after arraignment, (d) when a valid
plea has been entered, and (e) when the case was dismissed or
otherwise terminated without the express consent of the
accused.[33]
Gorion v. Regional Trial Court of Cebu[34] has held that the right
against double jeopardy is not violated when the first case was
dismissed in violation of the prosecution's right to due process.
Any such acquittal is "no acquittal at all, and thus can not
constitute a proper basis for a claim of former jeopardy": [35]
[The dismissal] unquestionably deprived the State of a fair
opportunity to present and prove its case. Thus, its right to due
process was violated. The said order is null and void and hence,
cannot be pleaded by the petitioner to bar the subsequent
annulment of the dismissal order or a reopening of the case on
the ground of double jeopardy. This is the rule obtaining in this
jurisdiction.[36]
Due process requires that both parties have a real and fair
opportunity to be heard. "The State, like the accused[,] is also
entitled to due process in criminal cases."[37] In Dimatulac v.
Villon:[38]
Indeed, for justice to prevail, the scales must balance; justice is
not to be dispensed for the accused alone. The interests of
society and the offended parties [including the State] which
have been wronged must be equally considered. Verily, a verdict
of conviction is not necessarily a denial of justice; and an
acquittal is not necessarily a triumph of justice; for, to the
society offended and the party wronged, it could also mean
injustice. Justice then must be rendered even-handedly to both
the accused, on one hand, and the State and offended party, on
the other.[39] (Citation omitted)
The state must be afforded the right to prosecute, present, and
prove its case. Just as importantly, the prosecution must be
able to fully rely on expressed legal provisions, as well as on
settled and standing jurisprudential principles. It should not be
caught in a bind by a sudden and retroactive imposition of
additional requirements for successful prosecution.
In Serino v. Zosa,[40] the judge announced that he would first
hear the civil aspect of the case before he criminal aspect of the
case. The public and private prosecutors then stepped out of
the courtroom. After trial in the civil case was finished, the
criminal case was called. By then, the prosecutors were
unavailable. The judge dismissed the case for failure to
prosecute. This Court held that double jeopardy did not attach
as the order of dismissal was void for having been issued
without due process.
In People v. Navarro,[41] a Joint Decision was issued acquitting
the accused of light threats and frustrated theft. However, there
was no actual joint trial in these two (2) criminal cases and no
hearing in the light threats case. This Court nullified the
judgment of acquittal for light threats.
In People v. Gomez,[42] the trial court issued a notice of hearing
only to the assistant city prosecutor, not to the special
prosecutor actively handling the case. The assistant city
prosecutor arrived for trial, but the special prosecutor did not,
as he did not know of the hearing. The records, however, were
with the special prosecutor. Not ready to appear, the assistant
city prosecutor moved to postpone the hearing. The trial court
denied the motion and proceeded to dismiss the case due to
alleged delays. This Court overruled the dismissal for depriving
the State of a fair opportunity to prosecute and convict.
In People v. Pablo,[43] the prosecution's last witness failed to
arrive. The prosecution moved to postpone the hearing as that
witness' testimony was indispensable. The judge denied the
motion. The defense, in turn, filed a motion to consider the
prosecution's case rested and to dismiss the case. The judge
granted the motion and acquitted all the accused on the same
day, "without giving the prosecution a chance to oppose the
same, and without reviewing the evidence already presented for
a proper assessment as to what crime has been committed by
the accused of which they may properly be convicted
thereunder[.]"[44]
This Court overturned the acquittal, declaring that courts must
be fair to both parties:
There are several actions which the respondent judge could and
should have taken if he had wished to deal with the case
considering the gravity of the crime charged, with fairness to
both parties, as is demanded by his function of dispensing
justice and equity. But he utterly failed to take such actions.
Thus, he should have first given warning that there will
definitely be no further postponement after that which he
reasonably thought should be the last.[45] (Emphasis supplied)
In these cases, the State was denied vital avenues for the
adequate prosecution of offenses, and was not given a fair
chance to fully present and prove its case. Thus:
A purely capricious dismissal of an information, as herein
involved, moreover, deprives the State of fair opportunity to
prosecute and convict. It denies the prosecution its day in
court. Accordingly, it is a dismissal without due process and,
therefore, null and void. A dismissal invalid for lack of a
fundamental prerequisite, such as due process, will not
constitute a proper basis for the claim of double jeopardy.[46]
Here, the import of identifying the "main plunderer" and the
"personal benefit" obtained was not emphasized upon the
prosecution at the onset. At the minimum, this Court's July 19,
2016 Decision should be considered an admonition, and then
applied only prospectively.
Such a consideration would be analogous to the course taken
by this Court in Carpio-Morales v. Court of Appeals.[47] There,
this court abandoned the condonation doctrine, but expressly
made its ruling applicable only to future cases, and not to the
case at hand. Respecting the people's reliance on "good
law,"[48] we stated:
Hence, while the future may ultimately uncover a doctrine's
error, it should be, as a general rule, recognized as "good law"
prior to its abandonment. Consequently, the people's reliance
thereupon should be respected. The landmark case on this
matter is People v. Jabinal, wherein it was ruled:
[W]hen 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.
Later, in Spouses Benzonan v. CA, it was further elaborated:
[P]ursuant to Article 8 of the Civil Code "judicial decisions
applying or interpreting the laws or the Constitution shall form
a part of the legal system of the Philippines." But while our
decisions form part of the law of the land, they are also subject
to Article 4 of the Civil Code which provides that "laws shall
have no retroactive effect unless the contrary is provided." This
is expressed in the familiar legal maxim lex prospicit, non
respicit, the law looks forward not backward. The rationale
against retroactivity is easy to perceive. The retroactive
application of a law usually divests rights that have already
become vested ... and hence, is unconstitutional.[49]
V
There is ample evidentiary basis for trial in the Sandiganbayan
to proceed: Effective immediately, all requests for the allocation or release of
intelligence funds shall indicate in full detail the specific
The prosecution underscores that funds were diverted to the purposes for which said funds shall be spent and shall explain
Office of the President.[50] Citing the April 6, the circumstances giving rise to the necessity for the
2015[51] Sandiganbayan Resolution, it also emphasizes that expenditure and the particular aims to be accomplished.
petitioner former President Gloria Macapagal-Arroyo's approvals (Emphasis supplied)[59]
for the letter-requests of petitioner Philippine Charity According to the Sandiganbayan, Uriarte and Benigno Aguas
Sweepstakes Office (PCSO) General Manager Rosario C. Uriarte (Aguas) made sweeping certifications that these funds were
(Uriarte) for the disbursement of additional Confidential and used for anti-lottery fraud and anti-terrorist operations, thus:
Intelligence Fund[52] and for the latter's use of these funds[53] are In an attempt to explain and justify the use of these [Confidential
overt acts of plunder within the contemplation of Section 2, in and Intelligence Fund] funds, Uriarte together with Aguas,
relation to Section 1(d) of the Anti-Plunder Law.[54]
certified that these were utilized for the following purposes:
a) Fraud and threat that affect integrity of operation.
To begin with, Arroyo's appointment of Uriarte to the position of
b) Bomb threat, kidnapping, destabilization and terrorism
PCSO General Manager already raises serious doubts.
c) Bilateral and security relation.[60]
[55]
 According to the prosecution, Uriarte's appointment was
The prosecution emphasized that the purpose[61] for the
made in violation of Republic Act No. 1169,[56] as amended by
disbursement not only lacked particulars, but that the "second
Batas Pambansa Blg. 42 and Presidential Decree No. 1157.
and third purposes were never mentioned in Uriarte's letter-
Section 2 of the amended Republic Act No. 1169 states that the
requests for additional [Confidential and Intelligence Fund]
power to appoint the PCSO General Manager is lodged in its
funds addressed to Arroyo."[62]
Board of Directors, not in the President of the Philippines:
Section 2. The [PCSO] general manager shall be appointed by
Moreover, under Commission on Audit Circular 2003-002, cash
the [PCSO] Board of Directors and he [or she] can be removed or
advances must be on a per-project basis and must be liquidated
suspended only for cause as provided by law. He [or she] shall
within one (1) month from the date the purpose of the cash
have the direction and control of the Office in all matters which
advance was accomplished. The prosecution adduced proof that
are not specifically reserved for action by the Board. Subject to
the certification of petitioner PCSO Budget and Accounts Officer
the approval of the Board of Directors, he [or she] shall also
Aguas that there were enough funds for cash advances[63] was
appoint the personnel of the Office, except the Auditor and the
fraudulent, as the Philippine Charity Sweepstakes Office had
personnel of the Office of the Auditor who shall be appointed by
suffered significant losses from 2006 to 2009.[64]
the Auditor General.
The purpose for the disbursement of Confidential and
The liquidation of Uriarte's cash advances, certified to by Aguas,
Intelligence Fund was not specifically detailed.[57] Letter of
was made on a semi-annual basis-without a monthly
Instruction No. 1282 expressly provides that requests for
liquidation or at least a progress report on the monthly
intelligence funds must particularly state the purposes for
liquidation.[65] The liquidation was also questionable. For
which these would be spent:[58]
instance, in 2009, only P24.97 million was liquidated, despite
the CIF's cash advances totalling P138.42 million for the same
year.[66] Aguas and Uriarte likewise submitted what appeared to
be spurious accomplishment reports, stating that the cash
advances were remitted to law enforcement agencies, which
denied these remittances.[67]
In addition, Aguas did not object to the charges that he falsified
his certifications of fund availability, and that the repeated
release of Confidential and Intelligence Fund cash advances was
riddled with several serious irregularities.[68] He later disclosed
that the funds were transferred to the Office of the President,
which was under Arroyo's full control as then President of the
Philippines.[69] This was resolved by the Sandiganbayan on April
6, 2015.
According to the prosecution, "Uriarte and Valencia [i.e. PCSO
Board of Directors Chairperson Sergio O. Valencia] continued to
receive [Confidential and Intelligence Fund] cash advances
despite having earlier unliquidated cash advances,"[70] and
Aguas could not have correctly certified that the previous
liquidations ere accounted for.[71] The prosecution further avers
that petitioner Commission on Audit Head of
Intelligence/Confidential Fund Fraud Audit Unit Nilda B. Plaras
"repeatedly issued credit notices in favor of Uriarte and Valencia
even as Aguas himself admitted that their [Confidential and
Intelligence Fund] advances remained unliquidated. Moreover,
Uriarte and Valencia continued to receive [Confidential and
Intelligence Fund] advances despite having earlier unliquidated
cash advances[.]"
According to the Sandiganbayan,[72] these acts violate Section 89
of Presidential Decree No. 1445, which states:
Limitations on cash advance. No cash advance shall be given
unless for a legally authorized specific purpose. A cash advance
shall be reported on and liquidated as soon as the purpose for
which it was given has been served. No additional cash advance
shall be allowed to any official or employee unless the previous
cash advance given to him is first settled or a proper accounting
thereof is made.
The prosecution also argues that before she fled the country
and evaded arrest, then PCSO General Manager Uriarte, with
Arroyo's complicity,[73] received and took possession of around
90% of the approximately P366 million cash advances from the
PCSO's Confidential and Intelligence Fund.[74] As payee, Uriarte
drew a total of 48 checks against the Confidential and
Intelligence Fund in 2008, 2009, and 2010.[75]She was able to
withdraw from the Confidential and Intelligence Fund solely on
the basis of Arroyo's approval, which was not ministerial in
nature,[76] and despite Uriarte not having been designated as a
special disbursing officer under Commission on Audit Circulars
92-385 and 03002.[77]
Uriarte was designated as a special disbursing officer only on
February 18, 2009,[78] after several disbursements were already
made.[79] She managed to use the additional Confidential and
Intelligence Fund at least three (3) times in 2008 and in early
2009, solely through Arroyo's approval.[80]
The prosecution further highlights that Uriarte "is a fugitive
from justice" and has remained at large.[81] Jurisprudence has
settled that flight is an indication of guilt.[82] For, indeed, "a
truly innocent person would normally grasp the first available
opportunity to defend [herself] and to assert [her]
innocence."[83] The Sandiganbayan's finding of ample evidence
against her is therefore bolstered by her leaving the country and
evading arrest.
The prosecution also takes exception to this Court's finding that
the commingling of funds is not illegal.[84] Section 6[85] of
Republic Act No. 1169 states that PCSO's revenues should be
remitted in specific portions to separate funds or accounts,
and not commingled together. The prosecution assails how the
accused diverted public money from the PCSO Charity Fund
and Prize Fund to the Operating Fund, and then commingled
these funds to "conceal the violation of the restrictions imposed
by [Republic Act] No. 1169."[86] The 2007 Annual Audit Report of
the Commission on Audit has specifically directed then PCSO
officers to immediately put a halt to this practice, but it fell on
deaf ears.[87]
In addition, the PCSO had been placed under the supervision
and control of the Department of Social Welfare and
Development,[88] and later of the Department of Health.[89] Yet,
Uriarte was able to bypass departmental approval and divert
PCSO funds amounting to P244 million to the Office of the
President,[90] upon the sole approval of Arroyo.[91] Later, with
conflict-of-interest, both Uriarte and Valencia approved the
disbursement vouchers and made the checks payable to them
at the same time.[92]
According to the prosecution, Uriarte requested for additional
Confidential and Intelligence Fund, and Arroyo's unqualified
approval of these requests was deliberate and willful.[93] The
prosecution argues that "[w]ithout [Arroyo's] participation,
[Uriarte] could not release any money because there was then
no budget for additional [Confidential and Intelligence
Fund]."[94] Thus, "Arroyo's unmitigated failure to comply with
the laws and rules regulating the approval of the [Confidential
and Intelligence Fund] releases betrays any claim of lack of
malice on her part."[95] Without Arroyo or Aguas, the conspiracy
to pillage the PCSO's Confidential and Intelligence Fund would
not have succeeded.[96]
VI
Plunder may be committed in connivance or conspiracy with
others. The share that each accused received is not the pivotal
consideration. What is more crucial is that the total
amount amassed is at least P50 million.[97] In a conspiracy, the
act of one is the act of all. Each conspirator is considered a
principal actor of the crime. Enrile v. People[98] is on point:
The law on plunder provides that it is committed by "a public
officer who acts by himself or in connivance with..." The term
"connivance" suggests an agreement or consent to commit an
unlawful act or deed with another; to connive is to cooperate or
take part secretly with another. It implies both knowledge and
assent that may either be active or passive.
Since the crime of plunder may be done in connivance or in
conspiracy with other persons, and the Information filed clearly
alleged that Enrile and Jessica Lucila Reyes conspired with one
another and with Janet Lim Napoles, Ronald John Lim and
John Raymund De Asis, then it is unnecessary to specify, as an
essential element of the offense, whether the ill-gotten wealth
amounting to at least P172,834,500.00 had been acquired by
one, by two or by all of the accused. In the crime of plunder,
the amount of ill-gotten wealth acquired by each accused
in a conspiracy is immaterial for as long as the total
amount amassed, acquired or accumulated is at least P50
million.[99]
Section 2 of the Anti-Plunder Law focuses on the "aggregate
amount or total value" amassed, accumulated, or acquired, not
its severed distributions among confederates. Thus, in the
present case, it is unnecessary to specify whether the allegedly
amassed amount of P365,997,915.00 ultimately came to the
possession of one, some, or all of the accused.
Enrile also underscores that conspiracy is not the essence of
plunder.[100] To sufficiently charge conspiracy as a mode of
committing plunder, an information may simply state that the
accused "conspired with one another":[101]
We point out that conspiracy in the present case is not charged
as a crime by itself but only as the mode of committing the
crime. Thus, there is no absolute necessity of reciting its
particulars in the Information because conspiracy is not the
gravamen of the offense charged.
It is enough to allege conspiracy as a mode in the commission of
[plunder] in either of the following manner: (1) by use of the
word "conspire," or its derivatives or synonyms, such as
confederate, connive, collude; or (2) by allegations of basic facts
constituting the conspiracy in a manner that a person of
common understanding would know what is intended, and with
such precision as the nature of the crime charged will admit, to
enable the accused to competently enter a plea to a subsequent
indictment based on the same facts.[102] (Emphasis in the
original)
In this case, the accused were properly informed that they were
to be answerable for the charge of plunder "in connivance" with
each other. As in Enrile, the information here uses the words,
"conniving, conspiring, and confederating":
The undersigned Assistant Ombudsman and Graft Investigation
and Prosecution Officer III, Office of the Ombudsman, hereby
accuse GLORIA MACAPAGAL-ARROYO, ROSARIO C. URIARTE,
SERGIO O. VALENCIA, MANUEL L. MORATO, JOSE R. TARUC
V, RAYMUNDO T. ROQUERO, MA. FATIMA A.S. VALDES,
BENIGNO B. AGUAS, REYNALDO A. VILLAR and NILDA B.
PLARAS, of the crime of PLUNDER, as defined by, and penalized
under Section 2 of Republic Act (R.A.) No. 7080, as amended by
R.A. No. 7659, committed, as follows:
That during the period from January 2008 to June 2010 or
sometime prior or subsequent thereto, in Quezon City,
Philippines, and within the jurisdiction of this Honorable Court,
accused GLORIA MACAPAGAL-ARROYO, then the President of
the Philippines, ROSARIO C. URIARTE, then General Manager
and Vice Chairman, SERGIO O. VALENCIA, then Chairman of
the Board of Directors, MANUEL L. MORATO, JOSE R. TARUC
V, RAYMUNDO T. ROQUERO, MA. FATIMA A.S. VALDES, then
members of the Board of Directors, BENIGNO B. AGUAS. then
Budget and Accounts Manager, all of the Philippine Charity
Sweepstakes Office (PCSO), REYNALDO A. VILLAR, then
Chairman, and NILDA B. PLARA, then Head of
Intelligence/Confidential Fund Fraud Audit Unit, both of the
Commission on Audit, all public officers committing the offense
in relation to their respective offices and taking undue
advantage of their respective official positions, authority,
relationships, connections or influence, conniving, conspiring
and confederating with one another, did then and there willfully,
unlawfully and criminally amass, accumulate and/or acquire,
directly or indirectly, ill-gotten wealth in the aggregate amount
or total value of THREE HUNDRED SIXTY FIVE MILLION NINE
HUNDRED NINETY SEVEN THOUSAND NINE HUNDRED
FIFTEEN PESOS (PHP365,997,915.00), more or less, through
any or a combination or a series of overt or criminal acts, or
similar schemes or means, described as follows:...[103]
I take exception to the majority's July 19, 2016 Decision stating
that the prosecution needed to specifically allege in the
information whether the conspiracy was by express agreement,
by wheel conspiracy, or by chain conspiracy.[104] In Enrile, an
accused's assent in a conspiracy may be active or passive, and
may be alleged simply "by use of the word 'conspire,' or its
derivatives or synonyms, such as confederate, connive,
collude[.]"[105] The prosecution has faithfully complied with these
requirements.
The information is valid in all respects. Retroactively mandating
additional averments for the prosecution violates its right to due
process.
VII
"Raids on the public treasury" must be understood in its plain
meaning. There is no need to derive its meaning from the other
words mentioned in Section 1(d)(l) of the Anti-Plunder Law. It
does not inherently entail taking for personal gain.
People v. Sandiganbayan[106] emphasized that the words in a
statute must generally be understood in their natural, plain,
and ordinary meaning, unless the lawmakers have evidently
assigned a technical or special legal meaning to these words.
[107]
 "The intention of the lawmakers - who are, ordinarily,
untrained philologists and lexicographers - to use statutory
phraseology in [a natural, plain, and ordinary] manner is always
presumed."[108]
Contrary to the majority's position,[109] there are no words with
which the term "raids on the public treasury," as mentioned in
Section 1(d)(l) of the Anti-Plunder Law are to be associated,
thereby justifying the application of noscitur a sociis.
Misappropriation, conversion, misuse, and malversation of
public funds are items enumerated distinctly from "raids on the
public treasury," they being separated by the disjunctive
"or."[110] Therefore, there is no basis for insisting upon the term
"raids on the public treasury" the concept of personal benefit.
Even if the preceding terms were to be associated with "raids on
the public treasury," it does not follow that "personal benefit"
becomes its element. For example, malversation does not
inherently involve taking for one's personal benefit. As pointed
out in the prosecution's Motion for Reconsideration,
[111]
 malversation under Article 220[112] of the Revised Penal Code
does not require that the offender personally benefited from the
crime. It only requires that he or she used the funds for a
purpose different from that for which the law appropriated
them.
This finds further support in the Congress' deletion of the
phrase, "knowingly benefited," from the final text of Republic
Act No. 7080.[113]
This Court can also apply by analogy the principles governing
the crime of theft. Like in plunder, theft involves the unlawful
taking of goods belonging to another.[114] In theft, the mere act of
taking-regardless of actual gain-already consummates the
crime.[115] In Valenzuela v. People:[116]
Unlawful taking, which is the deprivation of one's personal
property, is the element which produces the felony in its
consummated stage...
....
...The presumed inability of the offenders to freely dispose of
[i.e. gain from] the stolen property does not negate the fact that
the owners have already been deprived of their right to
possession upon the completion of the taking.
[T]he taking has been completed, causing the unlawful
deprivation of property, and ultimately the consummation of the
theft.[117]
This standard for theft takes on greater significance in
plunder. Valenzuela reminds us to not lose sight of the owners'
deprivation of their property.[118] Here, public funds were taken
from the government. Theft involves larceny against individuals;
plunder involves pillage of the State. Certainly, it is much more
depraved and heinous than theft:
Finally, any doubt as to whether the crime of plunder is
a malum in se must be deemed to have been resolved in the
affirmative by the decision of Congress in 1993 to include
it among the heinous crimes punishable by reclusion perpetua to
death.[119]
Plunder is a betrayal of public trust. Thus, it cannot require an
element that a much lesser crime of the same nature does not
even require. Ruling otherwise would "introduce a convenient
defense for the accused which does not reflect any legislated
intent."[120]
To raid means to "steal from, break into, loot, [or]
plunder."[121] Etymologically, it comes from the Old English
word, "rad," which referred to the act of riding[122] or to an
incursion along the border.[123] It described the incursion into
towns by malefactors on horseback (i.e. mounted military
expedition[124], who fled easily as peoples of more sedentary
cultures could not keep pace with them.[125] In 1863, during the
American Civil War, the word, "raid," gave birth to an agent
noun, "raider,"[126] or a person trained to participate in a sudden
attack against the enemy.[127] In more recent times, "raider" has
evolved to likewise refer to "a person who seizes control of a
company, as by secretly buying stock and gathering
proxies."[128] The act of taking through stealth, treachery, or
otherwise taking advantage of another's weakness characterizes
the word, "raid" or "raider."
The specific phrase used in the Anti-Plunder Law - "raids on the
pubic treasury" - is of American origin. It was first used during
the Great Depression, when the United States Congress sought
to pass several' bills, such as an appropriation of $35 million to
feed people and livestock,[129] in an attempt to directly lift
Americans from squalor.[130] Then President Herbert Hoover did
not see wisdom in government intervention. He vetoed these
bills, famously declaring that "[p]rosperity cannot be restored by
raids upon the public treasury."[131]
In its plain meaning, and taking its history and etymological
development into account, "raids on the public treasury" refers
to dipping one's hands into public funds, taking them as booty.
In the context of the Anti-Plunder Law, this may be committed
by a public officer through fraud, stealth, or secrecy, done over
a period of time.[132] The Sandiganbayan's November 5, 2013
Resolution in this case is enlightening:
[A] "raid on the public treasury" can be said to have been
achieved thr[ough] the pillaging or looting of public coffers
either through misuse, misappropriation or conversion, without
need of establishing gain or profit to the raider. Otherwise
stated, once a "raider" gets material possession of a government
asset through improper means and has free disposal of the
same, the raid or pillage is completed....[133]
There are reasonable grounds for proceeding with trial. The
voluminous records and pieces of evidence, consisting of at
least 600 documentary exhibits, testimonies of at least 10
prosecution witnesses, and case records of at least 40
folders[134]-which the Sandiganbayan carefully probed for
years[135]-point to a protracted scheme of raiding the public
treasury to amass ill-gotten wealth. There were ostensible
irregularities attested to by the prosecution in the disbursement
of the Philippine Charity Sweepstakes Office funds, such as the
accused's commingling of funds,[136]their non-compliance with
Letter of Instruction No. 1282,[137] and the unilateral approval of
disbursements.[138]
VIII
Under Section 119 of Rule 23 of the Revised Rules on Criminal
Procedure, an order denying a demurrer to evidence may not be
assailed through an appeal or by certiorari before judgment.
Thus, the accused's remedy for the Sandiganbayan 's denial of
their demurrer is to "continue with the case in due course and
when an unfavorable verdict is handed down, to appeal in the
manner authorized by law."[139]
The majority's July 19, 2016 Decision cites Nicolas v.
Sandiganbayan[140] in asserting that this Court may review the
Sandiganbayan's denial of a demurrer when there is grave
abuse of discretion. Nicolas stated:
[T]he general rule prevailing is that [certiorari] does not lie to
review an order denying a demurrer to evidence, which is
equivalent to a motion to dismiss, filed after the prosecution
has presented its evidence and rested its case.
Such order, being merely interlocutory, is not appealable; neither
can it be the subject of a petition for certiorari. The rule admits of
exceptions, however. Action on a demurrer or on a motion to
dismiss rests on the sound exercise of judicial discretion.[141]
(Emphasis supplied)
Indeed, Nicolas illustrates an instance when this Court
overruled the Sandiganbayan's denial of a demurrer for having
been issued with grave abuse of discretion.[142] What
sets Nicolas apart from this case, however, is that the
Sandiganbayan's grave abuse of discretion was so patent
in Nicolas. There, Economic Intelligence and Investigation
Bureau Commissioner Wilfred A. Nicolas was administratively
and criminally charged for his alleged bad faith and gross
neglect of duty. This Court exonerated him in the administrative
charge, finding that the records are bereft of any substantial
evidence of bad faith and gross negligence on his part.
[143]
 Considering that the criminal case-violation of Section 3(e)
of Republic Act No. 3019, the Anti-Graft and Corrupt Practices
Act, based on his alleged bad faith and gross negligence-
required the highest burden of proof beyond reasonable doubt,
then the finding that there was no substantial evidence of his
bad faith and gross negligence binds the criminal case for the
same act complained of.[144]
In contrast, here, the prosecution has sufficient evidence to
establish a prima facie case that accused committed plunder or
at least malversation. In ruling on a demurrer to evidence, this
Court only needs to ascertain whether there is "competent or
sufficient evidence to establish a prima facie case to sustain the
indictment."[145]
The prosecution should have been given the chance to present
this prima facie case against the accused. As I noted in my
dissent to the majority's July 19, 2016 Decision:
First, evidence was adduced to show that there was co-mingling
of PCSO's Prize Fund, Charity Fund, and Operating Fund. In
the A1mual Audit Report of PCSO for 2007, the Commission on
Audit already found this practice of having a "combo account"
questionable. The prosecution further alleged that this co-
mingling was "to ensure that there is always a readily accessible
fund from which to draw [Confidential and Intelligence Fund]
money." 
....
Second, the prosecution demonstrated through Former
President Arroyo's handwritten notations that she personally
approved PCSO General Manager Rosario C. Uriarte's (Uriarte)
"requests for the allocation; release and use of additional
[Confidential and Intelligence Fund.]" The prosecution
stressed that these approvals were given despite Uriarte's
generic one-page requests, which ostensibly violated Letter
of Instruction No. 1282's requirement that, for intelligence
funds to be released, there must be a specification of: (1)
specific purposes for which the funds shall be used; (2)
circumstances that make the expense necessary; and (3)
the disbursement's particular aims. The prosecution
further emphasized that Former President Arroyo's
personal approvals were necessary, as Commission on
Audit Circular No. 92-385's stipulates that confidential
and intelligence funds may only be released upon approval
of the President of the Philippines. Unrefuted, these
approvals are indicative of Former President Arroyo's
indispensability in the scheme to plunder.
....
Third, the prosecution demonstrated that Uriarte was enabled
to withdraw from the CIF solely on the strength of Former
President Arroyo's approval and despite not having been
designated as a special disbursing officer, pursuant, to
Commission on Audit Circulars 92-385 and 03-002.
....

Fourth, there were certifications on disbursement vouchers
issued and submitted by Aguas, in his capacity as PCSO
Budget and Accounts Manager, which stated that: there were
adequate funds for the cash advances; that prior cash advances
have been liquidated or accounted for; that the cash advances
were accompanied by supporting documents; and that the
expenses incurred through these were in order. As posited by
the prosecution, these certifications facilitated the drawing of
cash advances by PCSO General Manager Uriarte and
Chairperson Sergio Valencia.
....
Fifth, officers from the Philippine National Police, the Armed
Forces of the Philippines, and the National Bureau of
Investigation gave testimonies to the effect that no intelligence
activities were conducted by PCSO with their cooperation,
contrary to Uriarte's claims. . . The prosecution added that no
contracts, receipts, correspondences, or any other documentary
evidence exist to support expenses for PCSO's intelligence
operations. These suggest that funds allocated for the CIF were
not spent for their designated purposes, even as they appeared
to have been released through cash advances. This marks a
critical juncture in the alleged scheme of the accused. The
disbursed funds were no longer in the possession and control of
PCSO and, hence, susceptible to misuse or malversation.
....
Sixth, another curious detail was noted by the prosecution: that
Former President Arroyo directly dealt with PCSO despite her
having issued her own executive orders, which put PCSO under
the direct control and supervision of other agencies.
[147]
 (Emphasis in the original)
The matters established by the prosecution belie any grave
abuse of discretion on the part of the Sandiganbayan when it
ruled that trial must proceed. This is especially considering that
the Anti-Plunder Law does not even require proof of every single
act alleged to have been committed by the accused. What it
penalizes is the overarching scheme characterized by a series,
or combination of overt or criminal acts.[148]In Jose "Jinggoy"
Estrada v. Sandiganbayan:[149]
A study of the history of R.A. No. 7080 will show that the law
was crafted to avoid the mischief and folly of filing multiple
informations. The Anti-Plunder Law was enacted in the
aftermath of the Marcos regime where charges of ill-gotten
wealth were filed against former President Marcos and his
alleged cronies. Government prosecutors found no appropriate
law to deal with the multitude and magnitude of the acts
allegedly committed by the former President to acquire illegal
wealth. They also found that under the then existing laws such
as the Anti-Graft and Corrupt Practices Act, the Revised Penal
Code and other special laws, the acts involved different
transactions, different time and different personalities. Every
transaction constituted a separate crime and required a separate
case and the over-all conspiracy had to be broken down into
several criminal and graft charges. The preparation of multiple
Informations was a legal nightmare but eventually, thirty-nine
(39) separate and independent cases were filed against
practically the same accused before the Sandiganbayan.
Republic Act No. 7080 or the Anti-Plunder Law was enacted
precisely to address this procedural problem.[150] (Emphasis in
the original, citations omitted)
Thus, as I emphasized in my Dissent to the majority's July 19,
2016 Decision:
It would be inappropriate to launch a full-scale evaluation of the
evidence, lest this Court—an appellate court, vis-a-vis the
Sandiganbayan's original jurisdiction over plunder—be invited
to indulge in an exercise which is not only premature, but also
one which may entirely undermine the Sandiganbayan's
competence. Nevertheless, even through a prima facie review,
the prosecution adduced evidence of a combination or series of
events that appeared to be means in a coherent scheme to effect
a design to amass, accumulate, or acquire ill-gotten wealth.
Without meaning to make conclusions on the guilt of the
accused, specifically of petitioners, these pieces of evidence beg,
at the very least, to be addressed during trial. Thus, there was
no grave abuse of discretion on the part of the Sandiganbayan.
[151]
IX
Even granting that the prosecution has failed to establish as
case for plunder, trial must nevertheless proceed for
malversation.
This Court has consistently held[152] that the lesser offense of
malversation can be included in plunder when the amount
amassed reaches at least P50,000,000.00. The predicate acts of
bribery and malversation do not need to be charged under
separate informations when a person has already been charged
with plunder.
I reiterate the following from my dissent from the majority's July
19, 2016 Decision:
This Court's statements in Estrada v. Sandiganbayan are an
acknowledgement of how the predicate acts of bribery and
malversation (if applicable) need not be charged under separate
informations when one has already been charged with plunder:
A study of the history of R.A. No. 7080 will show that the law
was crafted to avoid the mischief and folly of filing multiple
informations. The Anti-Plunder Law was enacted in the
aftermath of the Marcos regime where charges of ill-gotten
wealth were filed against former President Marcos and his
alleged cronies. Government prosecutors found no appropriate
law to deal with the multitude and magnitude of the acts
allegedly committed by the former President to acquire illegal
wealth. They also found that under the then existing laws such
as the Anti-Graft and Corrupt Practices Act, the Revised Penal
Code and other special laws, the acts involved different
transactions, different time and different personalities. Every
transaction constituted a separate crime and required a separate
case and the over-all conspiracy had to be broken down into
several criminal and graft charges. The preparation of multiple
Informations was a legal nightmare but eventually thirty-nine
(39) separate and independent cases were filed against
practically the same accused before the Sandiganbayan.
Republic Act No. 7080 or the Anti-Plunder Law was enacted
precisely to address this procedural problem. (Emphasis in the
original, citations omitted)
In Atty. Serapio v. Sandiganbayan, the accused assailed the
information for charging more than one offense: bribery,
malversation of public funds or property, and violations of Sec.
3(e) of Republic Act No. 3019 and Section 7(d) of Republic Act
No. 6713. This Court observed that "the acts alleged in the
information are not separate or independent offenses, but are
predicate acts of the crime of plunder." The Court, quoting the
Sandiganbayan, clarified:
It should be stressed that the Anti-Plunder law specifically
Section 1(d) thereof does not make any express reference to any
specific provision of laws, other than R.A. No. 7080, as
amended, which coincidentally may penalize as a separate
crime any of the overt or criminal acts enumerated therein. The
said acts which form part of the combination or series of act are
described in their generic sense. Thus, aside from 'malversation'
of public funds, the law also uses the generic terms
'misappropriation,' 'conversion' or 'misuse' of said fund. The fact
that the acts involved may likewise he penalized under other
laws is incidental. The said acts are mentioned only as
predicate acts of the crime of plunder and the allegations
relative thereto are not to be taken or to be understood as
allegations charging separate criminal offenses punished under
the Revised Penal Code, the Anti-Graft and Corrupt Practices
Act and Code of Conduct and Ethical Standards for Public
Officials and Employees.
The observation that the accused in these petitions may be
made to answer for malversation was correctly pointed out by
Justice Ponferrada of the Sandiganbayan in his separate
concurring and dissenting opinion:
There is evidence, however, that certain amounts were released
to accused Rosario Uriarte and Sergio Valencia and these
releases were made possible by certain participatory acts of
accused Arroyo and Aguas, as discussed in the subject
Resolution. Hence, there is a need for said accused to present
evidence to exculpate them from liability which need will
warrant the denial of their Demurrer to Evidence, as under the
variance rule they maybe held liable for the lesser crimes which
are necessarily included in the offense of plunder.
Significantly, the Sandiganbayan's Resolution to the demurrers
to evidence includes the finding that the PCSO Chairperson
Valencia, should still be made to answer for malversation as
included in the Information in these cases. Since the
Information charges conspiracy, both petitioners in these
consolidated cases still need to answer for those charges. Thus,
the demurrer to evidence should also he properly denied. It
would be premature to dismiss and acquit the petitioners.[153]
X The rule proscribing appeals to denials of demurrers to evidence
The Anti-Plunder Law penalizes the most consummate larceny
and economic treachery perpetrated by repositories of public
trust. The majority's Decision—which effectively makes more
stringent the threshold for conviction by implying elements not
supported by statutory text—cripples the State's capacity to
exact accountability. In Joseph Ejercito Estrada v.
Sandiganbayan:[154]
Drastic and radical measures are imperative to fight the
increasingly sophisticated, extraordinarily methodical and
economically catastrophic looting of the national treasury. Such
is the Plunder Law, especially designed to disentangle those
ghastly tissues of grand-scale corruption which, if left
unchecked, will spread like a malignant tumor and ultimately
consume the moral and institutional fiber of our nation. The
Plunder Law, indeed, is a living testament to the will of the
legislature to ultimately eradicate this scourge and thus secure
society against the avarice and other venalities in public office.
These are times that try men's souls. In the checkered history of
this nation, few issues of national importance can equal the
amount of interest and passion generated by petitioner's
ignominious fall from the highest office, and his eventual
prosecution and trial under a virginal statute. This continuing
saga has driven a wedge of dissension among our people that
may linger for a long time. Only by responding to the clarion
call for patriotism, to rise above factionalism and prejudices,
shall we emerge triumphant in the midst of ferment.
[155]
 (Emphasis in supplied)
In issuing the Resolutions denying petitioners' demurrers to
evidence, the Sandiganbayan acted well-within its jurisdiction
and competence. It is not for us to substitute our wisdom for
that of the court which presided over the full conduct of trial, as
well as the reception and scrutiny of evidence.
is plain and basic. An accused's recourse is to present evidence
and to rebut the prosecution's evidence. The petitioners here
failed to establish an exceptional predicament.
This Court's overruling of the April 6, 2015 and September 10,
2015 resolutions of the Sandiganbayan on the strength of
findings of inadequacy on the part of the prosecution, but based
on standards introduced only upon the rendition of this Court's
July 19, 2016 Decision, violated the prosecution's
constitutional right to due process. Both the prosecution and
the accused deserve fairness: the prosecution, that it may
sufficiently establish its case in contemplation of every
appropriate legal standard; and the accused, that they may
more competently dispel any case the prosecution may have [4]
 461 Phil. 598 (2003) [Per J. Corona, En Banc].
established against them.
 Michael Bueza, Plunder in the Philippines, RAPPLER, June 21,
[5]

Trial must, thus, proceed. 2014, <http://www.rappler.com/newsbreak/60139-plunder-

philippines-history> (last visited April 17, 2017). 
Accordingly, I vote to GRANT the Motion for Reconsideration.
Public respondent Sandiganbayan committed no grave abuse of  Michael Bueza, Plunder in the Philippines, RAPPLER, June 21,
[6]

discretion and acted within its competence and jurisdiction in
issuing the assailed April 6, 2015 and September 10, 2015
Resolutions.
2014, <http://www.rappler.com/newsbreak/60139-plunder-
philippines-history> (last visited April 17, 2017).
 Estrada v. Sandiganbayan, 427 Phil. 820, 851-852 (2002)
[7]

[Per J. Puno, En Banc].

 Macapagal-Arroyo v. People. G.R. No. 220598, July 19, 2016
[1]

<http://sc.judiciary.gov.ph/pdf/web/viewer.html?  See Michael Bueza, Plunder in the Philippines, RAPPLER,

[8]

file=/jurisprudence/2016/july2016/220598.pdf> [Per J. June 21, 2014, <http://www.rappler.com/newsbreak/60139-

Bersamin, En Banc]. plunder-philippines-history> (last visited April 17, 2017).

 See Stolen Assert Recovery Initiative of the World Bank and

[2]  Republic Act No. 7080 (1991), An Act Defining and Penalizing
[9]

the United Nations Office on Drugs and Crime, the Crime of Plunder.
<http://star.worldbank.org/corruption-cases/node/18497>
(last visited April 17, 2017); see also University of the
[10]
 427 Phil. 820 (2002) [Per J. Puno, En Banc].
Philippines Alumni Obituary tor Senator Jovito Salonga, Martial
law veteran, Senate President who presided at anti-bases vote,
[11]
 Id. at 846.
dies, <http://alum.up.edu.phl?p=4864> (last visited April 17,
2017), Michael Bueza, Plunder in the Philippines, RAPPLER,
[12]
 Id.
June 21, 2014, <http://www.rappler.com/newsbreak/60139-
plunder-philippines-history> (last visited April 17, 2017), and
[13]
 Id.
Nikko Dizon. Salonga, senator, patriot, statesman; 95,
INQUIRER.NET <http:/newsinfo.inquirer.net/772662/salonga-  Dissenting Opinion of J. Leonen in Macapagal-Arroyo v.
[14]

senator-patriot-statesman-95> (last visited April 17, 2017). People, G.R. No. 220598, July 19, 2016,
<http://sc.judiciary.gov.ph/jurisprudence/2016/july2016/220
 Mortalla, Nelson Nogot, Graft and Corruption: The Philippine
[3] 598_leonen.pdf> [Per J. Bersamin, En Banc].
Experience,
<http://www.unafei.or.jp/english/pdf/RS_No56/No56_44PA_M
[15]
 Id. at 8.
oratalla.pdf> 502 (last visited April 17, 2017).
  Macapagal-Arroyo v. People, G.R. No. 220598, July 19, 2016
[16]
<http://sc.judiciary.gov.ph/pdf/web/viewer.html?
file=/jurisprudence/2016/july2016/220598.pdf> 35 [Per J.
Bersamin, En Banc].
 Enrile v. People, G.R. No. 213455, August 11, 2015
[17]
<http://sc.judiciary.gov.ph/pdf/web/viewer.html?
file=/jurisprudence/2015/august2015/213455.pdf> [Per J.
Brion, En Banc].
[18]
 Id. at 21.
[19]
 Rollo, pp. 4162-4171, Motion for Reconsideration.
 The prosecution refers to the insertion of new elements as a
[20]
"retroactive imposition" that "border[s] on judical legislation
[and] is bereft of basis within the context of R[epublic] A[ct] No.
7080." (See Motion for Reconsideration, p. 15)
 Macapagal-Arroyo v. People, G.R. No. 220598, July 19, 2016
[21]
<http://sc.judiciary.gov.ph/pdf/web/viewer.html?
file=/jurisprudence/2016/july2016/220598.pdf> 34 [Per J.
Bersamin, En Banc].
 Estrada .v. Sandiganbayan, 427 Phil. 820 (2002) [Per J.
[22]
Puno, En Banc].
 Macapagal-Arroyo v. People, G.R. No. 220598, July 19, 2016
[23]
<http://sc.judiciary.gov.ph/pdf/web/viewer.html?
file=/jurisprudenee/2016/july2016/220598.pdf> 34-35 [Per J.
Bersamin, En Banc].
 See Macapagal-Arroyo v. People. G.R. No. 220598, July 19,
[24]
2016
<http://sc.judiciary.gov.ph/pdf/web/viewer.html?/file=jurispru
dence/2016/july2016/220598.pdf> 31-35 [Per J. Bersamin, En
Banc].
 Estrada v. Sandiganbayan, 427 Phil. 820 (2002) [Per J.
[25]
Puno, En Banc].
[26]
 Id. at 839.
[27]
 Id. at 848-853.
[28]
 Id. at 853.
 People v. Medina, 354 Phil. 447, 460 ( 1998) [Per J. Regalado,
[29]
En Banc], citing People v. Paredes, 133 Phil. 633, 660 (1968)
[Per J. Angeles, En Banc]; Valdez v. People, 255 Phil. 156, 160-
161 (1986) [Per J. Cortes, En Banc]; People v. De la Cruz, 262
Phil. 838, 856 (1990) [Per J. Melencio-Herrera, Second
Division]; People v. Camaddo, 291 Phil. 154, 160-161 (1993)
[Per J. Bidin, Third Division].
 People v. Peralta, 134 Phil. 703, 723 (1968) [Per Curiam, En
[30]
Banc].
 Estrada v. Sandiganbayan, 427 Phil. 820, 839 (2002) [Per J.
[31]
Puno, En Banc].
[32]
 RULES OF COURT, Rule 117, sec. 9 provides:
Section 9. Former conviction or acquittal or former jeopardy. -
When a defendant shall have been convicted or acquitted, or the
case against him dismissed or otherwise terminated without the
express consent of the defendant, by a court of competent
jurisdiction, upon a valid complaint or information or other
formal charge sufficient in form and substance to sustain a
conviction, and after the defendant had pleaded to the charge,
the conviction or acquittal of the defendant or the dismissal of
the case shall be a bar to another prosecution for the offense
charged, or for any attempt to commit the same or frustration En Banc].
thereof, or for any offense which necessarily includes or is
necessarily included in the offense charged in the former  Carpio-Morales v. Court of Appeals, G.R. Nos. 217126-27,
[47]

complaint or information. November 10, 2015

<http://sc.judiciary.gov.ph/pdf/web/viewer.html?
 People v. Declaro, 252 Phil. 139, 143 (1989) [Per J. Cancayco,
[33]
file=/jurisprudence/2015/november2015/217126-27.pdf> [Per
First Division]. J. Perlas-Bernabe, En Banc].

 Gorion v. RTC of Cebu, 287 Phil. 1078 ( 1992) [Per J. Davide

[34]
 Carpio-Morales v. Court of Appeals, G.R. Nos. 217126-27,
[48]

Jr., Third Division]. November 10, 2015 [Per J. Perlas-Bernabe, En Banc].

[35]
 Id. at 1085. [49]
 Id. at 65-66.
[36]
 Id. [50]
 Rollo, p. 4164, Motion for Reconsideration.

 People v. Judge Tac-an, 446 Phil. 496, 505 (2003) [Per J.

[37] [51]
 Id. at 4178-4179.
Callejo, Second Division].
[52]
 Id. at 4174-4173.
 Dimatulac v. Villon, 358 Phil. 328 (1998) [Per J. Davide Jr.,
[38]

First Division]. [53]

 Id. at 4179.
[39]
 Id. at 365. [54]
 Id. at 4179-4181.
[40]
 148-B Phil. 497 (1971) [Per J. Makalintal, En Banc].  Id. at 4177. The prosecution states: "the PCSO Board
[55]

designated [Uriarte] by virtue of Arroyo's 'I desire' letter/order.

[41]
 159 Phil. 863 (1975) [Per J. Fernandez, Second Division]. Obviously, Uriarte's appointment by Arroyo was a clear
departure from Section 2 of [Republic Act] No. 1169.
[42]
 126 Phil. 640 (1967) [Per J. Bengzon, En Banc].
 An Act Providing for Charity Sweepstakes. Horse Races, and
[56]

[43]
 187 Phil. 190 (1980) [Per J. De Castro, First Division]. Lotteries.
[44]
 Id. at 197-198. [57]
 Id. at 4174.
[45]
 Id. at 196. [58]
 L.O.I. No. 1282 (1983).
[46]
 People v. Gomez, 126 Phil. 640, 645 (1967) [Per J. Bengzon, [59]
 L.O.I. No. 1282 (1983).
  See Dissenting Opinion of J. Leonen in Macapagal-Arroyo v.
[65]

 Dissenting Opinion of J. Leonen in Macapagal-Arroyo v.

[60]
People, G.R. No. 220598, July 19, 2016,
<http://sc.judiciary.gov.ph/jurisprudence/20l6/july2016/2205
98_leonen.pdf> 16 [Per J. Bersamin, En Banc] citing the
Sandiganbayan Resolution dated November 5, 2013.
People, G.R. No. 220598, July 19, 2016,
<http://sc.judiciary.gov.ph/jurisprudence/2016/july2016/220
598_leonen.pdf> 15 [Per J. Bersamin, En Banc].
[66]
 Rollo, p. 4174.

 According to Uriarte's testimony before the Senate, the main

[61] [67]
 Id. at 4179.
purpose for these cash advances was for the "roll-out" of the
small town lottery program. However, the accomplishment [68]
 Id. at 4181.
report submitted by Aguas shows that P137, 500,000 was spent
on non-related PCSO activities, such as "bomb threat, [69]
 Id. at 4179.
kidnapping, terrorism and bilateral and security relations." All
the cash advances made by Uriarte in 2010 were made in [70]
 Id. at 4115.
violation of LOI 1282, and COA Circulars 2003-002 and 92-385.
These were thus improper use of the additional CIF funds  See Dissenting Opinion of J. Leonen in Macapagal-Arroyo v.
[71]

amounting to raids on the PCSO coffers and were ill-gotten People, G.R. No. 220598, July 19, 2016,
because Uriarte had encashed the checks and came into <http://sc.judiciary.gov.ph/jurisprudence/2016/july2016/220
possession of the monies, which she had complete freedom to 598_leonen.pdf> 15 [Per J. Bersamin, En Banc].
dispose of, but was not able to properly account for. (Dissenting
Opinion of J. Leonen in Macapagal-Arroyo v. People, G.R. No. [72]
 Id.
220598, July 19, 2016,
<http://sc.judiciary.gov.ph/jurisprudencc/2016/july2016/220 [73]
 Id. at 4176.
598_leonen.pdf> 13-14 [Per J. Bersamin, En Banc] citing the
Sandiganbayan Resolution dared November 5, 2013.) [74]
 Id. at 4175.

 Dissenting Opinion of J. Leonen in Macapagal-Arroyo v.

[62] [75]
 Id. at 4174.
People, G.R. No. 220598, July 19, 2016,
<http://sc.judiciary.gov.ph/jurisprudence/2016/july2016/220 [76]
 Id. at 4177.
598_leonen.pdf> 16 [Per J. Bersamin, En Banc] citing the
Sandiganbayan Resolution dated November 5, 2013. [77]
 Id. at 1652-1653.
[63]
 Rollo, p. 4178. [78]
 Id. at 1653.
[64]
 Id. at 4178-4182.  At that time, three (3) disbursements were already made
[79]

based on the approval of the requests of PCSO General Manager

Uriarte. These were made on April 2, 2008, August 13, 2008,
and January 19, 2009.
[80]
 Rollo (G.R. No. 220598), p. 1653.
[81]
 Id. at 4174.
 People v. Diaz, 443 Phil. 67, 89 (2003) [Per J. Austria-
[82]
Martinez, Second Division].
 People v. Del Mundo, 418 Phil. 740, 753 (2001) [Per J.
[83]
Ynares-Santiago, First Division].
[84]
 Rollo, p. 4171.
[85]
 Rep. Act No. 1169, sec. 6 provides:
Section 6. Allocation of Net Receipts. - From the gross receipts
from the sale of sweepstakes tickets, whether for sweepstakes
races, lotteries. or similar activities, shall be deducted the
printing cost of such tickets, which in no case shall exceed two
percent of such gross receipts to arrive at the net receipts. The
net receipts shall be allocated as follows:
A. Fifty-five percent (55%) shall be set aside as a prize fund for
the payment of prizes, including those for the owners, jockeys of
running horses, and sellers of winning tickets.
Prizes not claimed by the public within one year from date of
draw shall be considered forfeited, and shall form part of the
charity fund for disposition as stated below.
B. Thirty percent (30%) shall be set aside as contributions to
the charity fund from which the Board of Directors. in
consultation with the Ministry of Human Settlement on
identified priority programs, needs. and requirements in specific
communities and with approval of the Office of the President
(Prime Minister), shall make payments or grants for health
programs, including the expansion of existing ones, medical
assistance and services and/or charities of national character,
such as the Philippine National Red Cross, under such policies
and subject to such rules and regulations as the Board may
from time establish and promulgate. The Board may apply part
of the contributions to the charity fund to approved investments
of the Office pursuant to Section 1 (B) hereof, but in no case
shall such application to investments exceed ten percent (10%)
of the net receipts from the sale of sweepstakes tickets in any
given year.
Any property acquired by an institution or organization with
funds given to it under this Act shall not be sold or otherwise
disposed of without the approval of the Office of the President
(Prime Minister), and that in the event of its dissolution all such
property shall be transferred to and shall automatically become
the property of the Philippine Government.
C. Fifteen (15%) percent shall he set aside as contributions to
the operating expenses and capital expenditures of the Office.
D. All balances of any funds in the Philippine Charity
Sweepstakes Office shall revert to and form part of the charity
fund provided for in paragraph (B), and shall be subject to
disposition as above stated. The disbursements of the allocation
herein authorized shall be subject to the usual auditing rules
and regulations.
[86]
 Rollo, p. 4172.
[87]
 Id.
[88]
 Exec. Order No. 383, sec. 1 provides:
Section 1. The Philippine Charity Sweepstakes Office shall Brion, En Banc].
hereby be under the supervision and control of the Department
of Social Welfare and Development. [99]
 Id. at 22.
[89]
 Exec. Order No. 455, sec. 1 provides: [100]
 Id.

Section 1. The Philippine Charity Sweepstakes Office shall [101]

 Id.
hereby be placed under the supervision and control of the
Department of Health. [102]
 Id.

 Dissenting Opinion of J. Leonen in Macapagal-Arroyo v.

[90] [103]
 Rollo, pp. 305-307-A.
People, G.R. No. 220598, July 19, 2016
<http://sc.judiciary.gov.ph/jurisprudence/2016/july2016/220  Macapagal-Arroyo v. People, G.R. No. 220598, July 19, 2016
[104]

598_leonen.pdf> [Per J. Bersamin, En Banc] citing the <http://sc.judieiary.gov.ph/pdf/web/viewer.html?

Sandiganbayan Resolution dated November 5, 2013.
[91]
 Rollo (G.R. No. 220598), p. 1831.
file=/jurisprudence/2016/july2016/220598.pdf> 32-33 [Per J.
Bersamin, En Banc].
 Enrile v. People, G.R. No. 213455, August 11, 2015
[105]

[92]
 Id. at 4174. <http://sc.judiciary.gov.ph/pdf/web/viewer.html?
file=/jurisprudence/2015/august2015/213455.pdf> 22 [Per J.
[93]
 Id. at 4177. Brion, En Banc].
[94]
 Id. at 4176.  People v. Sandiganbayan, 613 Phil. 407 (2009) [Per J.
[106]

Peralta, Third Division].

[95]
 Id. at 4178.
[107]
 Id. at 426.
[96]
 Id. at 4181.
[108]
 Id.
 Enrile v. People, G.R. No. 213455, August 11, 2015
[97]

<http://sc.judieiary.gov.ph/pdf/web/viewer.html?  Macapagal-Arroyo v. People, G.R. No. 220598, July 19, 2016

[109]

file=/jurisprudence/2015/august2015/213455.pdf> 22 [Per J. <http://sc.judiciary.gov.ph/pdf/web/viewer.html?

Brion, En Banc]. file=/jurisprudence/2016/july2016/220598.pdf> 44-45 [Per J.
Bersamin, En Banc].
 Enrile v. People, G.R. No. 213455, August 11, 2015
[98]

<http://sc.judiciary.gov.ph/pdf/web/viewer.html? The Decision stated:

file=jurisprudence/2015/august2015/213455.pdf> [Per J.
To discern the proper import of the phrase raids on the public
treasury, the key is to look at the accompanying words:
misappropriation, conversion, misuse or malversation of public
funds. This process is conformable with the maxim of statutory
construction noscitur a sociis, by which the correct construction
of a particular word or phrase that is ambiguous in itself or is
equally susceptible of various meanings may be made by
considering the company of the words in which the word or
phrase is found or with which it is associated. Verily, a word or
phrase in a statute is always used in association with other
words or phrases, and its meaning may, therefore, be modified
or restricted by the latter.
 Rep. Act No. 7060, sec. 1(d)(l) states that plunder is
[110]
committed "through misappropriation, conversion, misuse, or
malversation of public funds or raids on the public treasury."
[111]
 Rollo, p. 4169, Motion for Reconsideration.
[112]
 REV. PEN. CODE, art. 220 provides:
Article 220. Illegal Use of Public Funds or Property. - Any public
officer who shall apply any public fund or property under his
administration to any public use other than that for which such
fund or property were appropriated by law or ordinance shall
suffer the penalty of prision correccional in its minimum period
or a fine ranging from one-half to the total of the sum
misapplied, if by reason of such misapplication, any damage or
embarrassment shall have resulted to the public service. In
either case, the offender shall also suffer the penalty of
temporary special disqualification.
If no damage or embarrassment to the public service has
resulted, the penalty shall be a fine from 5 to 50 per cent of the
sum misapplied.
[113]
 Record of the Senate, Vol. IV, No. 141, p. 1403 (1989).
[114]
 REV. PEN. CODE, art. 308 provides:
Article 308. Who are liable for theft. - Theft is committed by any
person who, with intent to gain but without violence against or
intimidation of persons nor force upon things, shall take
personal property of another without the latter's consent.
Theft is likewise committed by:
1. Any person who, having found lost property, shall fail to
deliver the same to the local authorities or to its owner;
2. Any person who, after having maliciously damaged the
property of another, shall remove or make use of the fruits or
object of the damage caused by him; and
3. Any person who shall enter an inclosed estate or a field
where trespass is forbidden or which belongs to another and
without the consent of its owner, shall hunt or fish upon the
same or shall gather cereals, or other forest or farm products.
 Valenzuela v. People, 552 Phil. 381, 416-417 (2008) [Per J.
[115]
Tinga, En Banc].
 Valenzuela v. People, 552 Phil. 381 (2008) [Per J. Tinga, En
[116]
Banc].
[117]
 Id. at417-418.
[118]
 Id. at 418.
 Estrada v. Sandiganbayan, 421 Phil. 290. 365 (2001) [Per J.
[119]
Bellosillo, En Banc].
  Valenzuela v. People, 552 Phil. 381, 417 (2008) [Per J.
[120]
 ROBERT A. CARO, THE PATH TO POWER: THE YEARS OF
[129]

Tinga, En Banc]. LYNDON JOHNSON 247 (1982).

 Collins Dictionary,
[121]
 Herbert Hoover, <http://www.history.com/topics/us-
[130]

<https://www.collinsdictionary.com/dictionary/english/raid> presidents/herbert-hoover> (last visited April 17, 2017).

(last visited April 17, 2017).
 Herbert Hoover, <http://www.history.com/topics/us-
[131]

 ANDREAS H. JUCKER, DANIELA LANDERT, ANNINA

[122]
presidents/herbert-hoover> (last visited April 17, 2017).
SEILER, NICOLE STUDER-JOHO, MEANING IN THE HISTORY
OF ENGLISH: WORDS AND TEXTS IN CONTEXT 64 (2013).  See S.B. No. 733, as cited in Estrada v. Sandiganbayan, 427
[132]

Phil. 820, 851 (2002) [Per J. Puno, En Banc].

 Collins Dictionary,
[123]

<https://www.collinsdictionary.com/dictionary/english/raid> [133]
 Rollo, pp. 450-510.
(last visited April 17, 2017).
[134]
 Id. at 4175.
 Online Etymology Dictionary,
[124]

<http://www.etymonline.com/index.php? [135]
 Id. at 4164.
term=raid&allowed_in_frame=0> (last visited April 17, 2017).
 The additional allocations for CIF were of increasing
[136]

 The Science Show,

[125]
amounts running into the hundreds of millions of pesos. In
<https:/web.archive.org/web/20081006030339/http://www.a 2010 alone, it was One Hundred Fifty Million Pesos
bc.net.au/rn/science/ss/stories/s70986.htm> (last visited (P150,000,000.00). The General Manager of the PCSO was able
April 17, 2017). to disburse more than One Hundred Thirty Eight Million Pesos
(P138,000,000.00) to herself. That disbursement remains
 Douglas Harper, Online Etymology Dictionary,
[126]
unaccounted.
<http://www.dictionary.com/browse/raider> (last visited April
17, 2017). Despite continued annual warnings from the Commission on
Audit with respect to the illegality and irregularity of the co-
 Collins Dictionary,
[127]
mingling of funds that should have been allocated for the Prize
<https://www.collinsdictionary.com/dictionary/english/raid> Fund, the Charitable Fund, and the Operational Fund, this co-
(last visited April 17, 2017). mingling was maintained.

 Based on the Random House Dictionary, Random House,

[128]
See Dissenting Opinion of J. Leonen in Macapagal-Arroyo v.
Inc. (2017) <http://www.dictionary.com/browse/raider> (last People, G.R. No. 220598, July 19, 2016,
visited April 17, 2017). <http://sc.judiciary.gov.ph/jurisprudence/2016/july2016/220
598_leonen.pdf> [Per J. Bersamin, En Banc].

 This Letter of Instruction requires a request's specification
[137]
of three (3) things: first, the specific purposes for which the
funds shall be used; second, circumstances that make the
expense necessary; and third, the disbursement's particular
aims. L.O.I. No. 1282 (1983), par. 2 provides: "Effective
immediately, all requests for the allocation or release of
intelligence funds shall indicate in full detail the specific
purposes for which said funds shall be spent and shall explain
the circumstances giving rise to the necessity for the
expenditure and the particular aims to be accomplished."
 Uriarte used Arroyo's approval to illegally accumulate these
[138]
CIF funds which she encashed during the period 2008-2010.
Uriarte utilized Arroyo's approval to secure PCSO Board
confirmation of such additional CIF funds and to "liquidate" the
same resulting in the questionable credit advices issued by
accused Plaras. These were simply consummated raids on
public treasury. (See Dissenting Opinion of J. Leonen
in Macapagal-Arroyo v. People, G.R. No. 220598, July 19, 2016,
<http://sc.judiciary.gov.ph/jurisprudence/2016/july2016/220
598_leonen.pdf> [Per J. Bersamin, En Banc] citing the
Sandiganbayan Resolution dated November 5, 2013).
 Soriquez v. Sandiganbayan, 510 Phil. 709, 719 (2015) [Per
[139]
J. Garcia, Third Division].
 Nicolas v. Sandiganbayan, 568 Phil. 297 (2008) [Per J.
[140]
Carpio-Morales, Second Division].
[141]
 Id. at 309.
[142]
 Id.
[143]
 Id.
[144]
 Id.
[145]
 Id. at 311.
 Dissenting Opinion of J. Leonen in Macapagal-Arroyo v.
[147]
People, G.R. No. 220598, July 19, 2016
<http://sc.judiciary.gov.ph/jurisprudence/2016/july2016/220
598_leonen.pdf> 18-32 [Per J. Bersamin, En Banc].
[148]
 Rep. Act No. 7080, sec. 4 provides:
Section 4. Rule of Evidence. - For purposes of establishing the
crime of plunder, it shall not be necessary to prove each and
every criminal act done by the accused in furtherance of the
scheme or conspiracy to amass, accumulate or acquire ill-
gotten wealth, it being sufficient to establish beyond reasonable
doubt a pattern of overt or criminal acts indicative of the overall
unlawful scheme or conspiracy.
 Estrada v. Sandiganbayan, 427 Phil. 820 (2002) [Per J.
[149]
Puno, En Banc].
[150]
 Id. at 851.
 Dissenting Opinion of J. Leonen in Macapagal-Arroyo v.
[151]
People, G.R. No. 220598, July 19, 2016,
<http://sc.judiciary.gov.ph/jurisprudence/2016/july2016/220
598_leonen.pdf> 10 [Per J. Bersamin, En Banc].
 See Estrada v. Sandiganbayan, 421 Phil. 290 (2001) [Per J.
[152]
Bellosillo, En Banc]; Enrile v. People, G.R. No. 213455, August
11, 2015, 766 SCRA 1 [Per J. Brion, En Banc]; Serapio v.
Sandiganbayan, 444 Phil. 499 (2003) [Per J. Callejo Sr., En
Banc]; Estrada v. Sandiganbayan, 427 Phil. 820 (2002) [Per J.
Puno, En Banc].
  Dissenting Opinion of J. Leonen in Macapagal-Arroyo v.
[153]

People, G.R. No. 220598, July 19, 2016,

<http://sc.judiciary.gov.ph/jurisprudence/2016/july2016/220
598_leonen.pdf> 35-36 [Per J. Bersamin, En Banc].

 Estrada v. Sandiganbayan, 421 Phil. 290 (2001) [Per J.

[154]

Bellosillo, En Banc].
[155]
 Id. at 367.

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809 Phil. 65
THIRD DIVISION
[ G.R. NO. 185320, April 19, 2017 ]
ROSENDO DE BORJA, PETITIONER, VS. PINALAKAS NA
UGNAYAN NG MALILIIT NA MANGINGISDA NG LUZON,
MINDANAO AT VISAYAS ("PUMALU-MV"), PAMBANSANG
KATIPUNAN NG MGA SAMAHAN SA KANAYUNAN ("PKSK")
AND TAMBUYOG DEVELOPMENT CENTER, INC. ("TDCI"),
RESPONDENTS;
REPUBLIC OF THE PHILIPPINES, OPPOSITOR.
[G.R. NO. 185348]
TAMBUYOG DEVELOPMENT CENTER, INC., REPRESENTED
BY DINNA L. UMENGAN, PETITIONER, VS. ROSENDO DE
BORJA, PINALAKAS NA UGNAYAN NG MALILIIT NA
MANGINGISDA NG LUZON, MINDANAO AT VISAYAS
("PUMALU-MV"), REPRESENTED BY CESAR A. HAWAK, AND
PAMBANSANG KATIPUNAN NG MGA SAMAHAN SA
KANAYUNAN ("PKSK"), REPRESENTED BY RUPERTO B.
ALEROZA, RESPONDENTS;
REPUBLIC OF THE PHILIPPINES, OPPOSITOR.
JARDELEZA, J.: 
Petitioners call upon us to disregard procedural rules on
account of the alleged novelty and transcendental importance of
the issue involved here. However, the transcendental
importance doctrine cannot remedy the procedural defects that
plague this petition. In the words of former Supreme Court
Chief Justice Reynato Puno, "no amount of exigency can make
this Court exercise a power where it is not proper."[1] A petition
for declaratory relief, like any other court action, cannot prosper
absent an actual controversy that is ripe for judicial
determination.
In these consolidated petitions,[2] petitioners Rosendo De Borja
(De Borja) and Tambuyog Development Center, Inc. (TDCI) seek
to nullify the February 21, 2008 Decision[3] and November 3,
2008 Resolution[4] of the Court of Appeals (CA) in CA-G.R. CV
No. 87391. The CA reversed the March 31, 2006 Decision[5] of
the Regional Trial Court (RTC) of Malabon City-Branch 74 and
dismissed, on the ground of prematurity, the petition for
declaratory relief filed by De Borja and the petition-in-
intervention filed by respondents Pinalakas na Ugnayan ng
Maliiiit na Mangingisda ng Luzon, Mindanao at Visayas
(PUMALU-MV), Pambansang Katipunan ng mga Samahan sa
Kanayunan (PKSK), and TDCI.[6]
On February 16, 2004, De Borja, a commercial fishing operator,
filed a Petition for Declaratory Relief[7] (De Borja's petition) with
the RTC of Malabon City. He asked the court to construe and
declare his rights under Section 4(58) of Republic Act No. 8550
or The Philippine Fisheries Code of 1998 (1998 Fisheries Code).
De Borja asked the court to determine the reckoning point of
the 15-kilometer range of municipal waters, as provided under
Section 4(58) of the 1998 Fisheries Code, in relation with Rule
4.1 (a) of its Implementing Rules and Regulations (IRR).[8]Section
4(58) of the 1998 Fisheries Code and Rule 4.1 (a) of the IRR
respectively read:
Sec. 4(58). Municipal waters – include not only streams, lakes,
inland bodies of water and tidal waters within the municipality
which are not included within the protected areas as defined
under Republic Act No. 7586 (The NIPAS Law), public forest,
timber lands, forest reserves or fishery reserves, but
also marine waters included between two (2) lines drawn
perpendicular to the general coastline from points where
the boundary lines of the municipality touch the sea at low
tide and a third line parallel with the general coastline
including offshore islands and fifteen (15) kilometers from
such coastline. Where two (2) municipalities are so situated on
opposite shores that there is less than thirty (30) kilometers of
marine waters between them, the third line shall be equally
distant from opposite shore of the respective municipalities.
(Emphasis and underscoring supplied.)
Rule 4.1 (a) Coastline – refers to the outline of the mainland
shore touching the sea at mean lower low tide.
De Borja pleaded that the construction of the reckoning point of
the 15-kilometer range affects his rights because he is now
exposed to apprehensions and possible harassments that may
be brought by conflicting interpretations of the 1998 Fisheries
Code.[9] He further claimed that varying constructions of the law
would spark conflict between fishermen and law enforcers, and
would ultimately affect food security and defeat the purpose of
the 1998 Fisheries Code.[10]
De Borja, however, did not implead any party as respondent in
his petition. The RTC, in an Order[11] dated March 9, 2004,
directed the Office of the Solicitor General (OSG) to file a
comment.
Meanwhile, the National Mapping and Resource Information
Authority (NAMRIA), through Engr. Enrique A. Macaspac, Chief
of Geodesy and Geophysics Division, filed a letter-request to
intervene and comment on the petition.[12] In its Comment,
[13]
 NAMRIA stated that Rule 4.1 (a) used the term "coastline,"
while Section 4(58) specified "general coastline." It thus
concluded that the definition of "coastline" in Rule 4.1 (a) is
valid only for municipalities without any island. NAMRIA
explained that by definition, the "general coastline" of a
municipality without any island is simply the coastline of the
mainland (or mainland shore) of that municipality. On the other
hand, a municipality with island/s has the coastline/s of its
island/s; hence, its general coastline consists of not only the
coastline of its mainland (or mainland shore) but also the
coastline/s of its island/s.[14] Thus, where the municipality is
archipelagic, the archipelagic principle shall apply in
delineating municipal waters, i.e., the 15-kilometer range of the
municipal waters of an archipelagic municipality shall be
reckoned not only from the coastline of the mainland but also
from the coastline/s of the island/s of that municipality, such
coastline/s of the island/s being part and parcel of the general
coastline of that municipality.[15]
NAMRIA also gave their opinion as to whether the phrase
"including offshore islands" in the phrase "a third line parallel
with the general coastline including offshore islands and fifteen
(15) kilometers from such coastline" refer to the "third line"
(meaning, the third line includes or encloses the islands) or to
the "general coastline" (meaning, the general coastline includes
the coastline/s of the island/s). NAMRIA noted that "general
coastline" precedes the word "including;" thus, "including
offshore islands" must be referring to the "general coastline."
NAMRIA also noted that the "third line" is qualified by two
conditions: the third line is (1) parallel with the general
coastline including offshore islands and (2) 15 kilometers from
such coastline. NAMRIA concluded that to satisfy both
conditions, the phrase "including offshore islands" must refer to
the "general coastline," or in other words, must use the
archipelagic principle.[16] NAMRIA stated that "including offshore
islands" appeared only in the 1998 Fisheries Code. Earlier laws,
which defined municipal waters, did not have it. NAMRIA then
theorized that its presence in Section 4(58) of the 1998
Fisheries Code does not rule out the applicability of the
archipelagic principle in delineating municipal waters. This
interpretation is technically correct and consistent with the
procedure in delimiting maritime boundaries under the United
Nations Convention on the Law of the Sea.[17]
In its Comment,[18] the OSG narrated the events that led De
Borja to file the petition. The OSG averred that the root cause of
the petition was the adoption of the archipelagic principle in
delineating and delimiting municipal waters of municipalities
with offshore islands under Department of Environment and
Natural Resources (DENR) Administrative Order No. 2001-
17[19] (DAO 17).[20] Specifically, Section 5(B)(l)(c) of DAO 17
provides:
Sec. 5. Systems and Procedures, x x x
B. Procedure for Delineation and Delimitation of Municipal
Waters
1. Delineation of Municipal Waters
xxx
c) Use of Municipal archipelagic baselines  offshore islands" in Section 4(58) of the 1998 Fisheries Code
i. Where the territory of a municipality includes several
islands, the outermost points of such islands shall be
used as basepoints and connected by municipal
archipelagic baselines, provided that the length of such
baselines shall not exceed thirty (30) kilometers.
ii. The municipal archipelagic baselines shall determine the
general coastline of the municipality for purposes of
delineation and delimitation.
iii. Islands, isles, or islets located more than thirty (30)
kilometers from the mainland of the municipality shall have
their own separate coastlines.
iv. Rocks, reefs, cays, shoals, sandbars, and other features
which are submerged during high tide shall not be used as
basepoints for municipal archipelagic baselines. Neither
shall they have their own coastlines.
v. The outer limits of the municipal waters of the municipality
shall be enclosed by a line parallel to the municipal
archipelagic baselines and fifteen (15) kilometers therefrom.
(Emphasis supplied.)
The OSG detailed that on September 21, 2001, the Committee
on Appropriations of the House of Representatives adopted
Committee Resolution No. 2001-01 (House Committee
Resolution) which recommended the revocation of DAO 17 for
being tainted with legal infirmities.[21] The House Committee
Resolution stated that the DENR has no jurisdiction to issue
DAO 17 because Section 123[22] of the 1998 Fisheries Code
clearly referred to the Department of Agriculture (DA) as the
department which shall determine the outer limits of municipal
waters.[23]More importantly, the House Committee Resolution
claimed that DAO 17 directly contravened the 1998 Fisheries
Code and the Local Government Code (LGC). The House
Committee Resolution explained that the phrase "including
means that offshore islands are deemed to be within 15
kilometers from the shorelines; therefore, negating the
applicability of the archipelagic principle.[24] DAO 17, however,
authorized otherwise. The implementation of DAO 17, therefore,
would vastly reduce the fishing grounds already defined under
the 1998 Fisheries Code and result in adverse effects to the
fishing industry and the nation's food security.[25]

The House Committee Resolution was also sent to the DENR for
appropriate action. The DENR, however, did not act on it. Thus,
upon request of the House Committee on Appropriations, the
Legal Affairs Bureau (LAB) of the House of Representatives
issued a legal opinion on the validity of DAO 17. The LAB
echoed the legal arguments contained in the House Committee
Resolution. It asserted that the employment of the phrase
"including offshore islands" was intentional to remove any
doubt as to where the 15 kilometers should be reckoned from—
that is, from the general coastline of the actual mainland and
not from the archipelagic baseline.[26]
The matter was also referred to the Department of Justice (DOJ)
for opinion. On November 27, 2002, the DOJ issued Opinion
No. 100, which stated that the DA, not the DENR, has
jurisdiction to authorize the delineation of municipal waters.
[27]
 The DOJ then dispensed with the determination of whether
DAO 17, which adopted the archipelagic principle in the
delineation of municipal waters, was consistent with the
provisions of the 1998 Fisheries Code.[28] As a result of the DOJ
Opinion, the DENR Secretary revoked DAO 17 through DENR
Administrative Order No. 2003-07.[29]
The OSG stressed that the DA was in the process of formulating
guidelines for the delineation and delimitation of municipal
waters. In fact, the DA conducted a Fisheries Summit on
November 12 to 13, 2003 to consult small fisherfolk and the
commercial fishing sector on the definition of municipal waters.
However, these negotiations reached an impasse, which then
triggered De Borja's filing of the petition before the RTC. [30]
The OSG explained the two conflicting views on the delineation
of municipal waters, namely: (1) the archipelagic principle
espoused by the Municipalities of the Philippines and small
fisher folk; and (2) the mainland principle favored by the
commercial fishing sector.[31] Under the mainland principle, the
15-kilometer range shall be reckoned from the municipality's
coastline including offshore islands. The archipelagic principle,
on the other hand, reckons the 15-kilometer range of municipal
waters from the outermost offshore islands, and not the
mainland. The outer limits of the municipal waters of the
municipality shall be enclosed by a line parallel to the
municipal archipelagic baseline and 15 kilometers therefrom.[32]
The OSG argued that the mainland principle should be adopted.
It stated that the adoption of the archipelagic principle found in
Article I of the 1987 Constitution, which is utilized in defining
the Philippine territory vis-a-vis other states, is relevant only
when the issue of intrusion into Philippine territorial water
arises—that is, when foreign fishing vessels enter Philippine
territorial waters.[33]
The OSG further explained that:
The phrase "including offshore islands" used to modify general
coastline in Section 4(58) of R.A. No. 8550 shows the
legislative intent that the mainland shall be the reckoning point
of the fifteen kilometer range of municipal waters, and not the
archipelagic municipal baseline. To adopt the archipelagic
municipal baseline as the reckoning point would be to render
the phrase "including offshore islands" redundant because
offshore islands would be deemed already included in drawing
the archipelagic baseline.
A correct grammatical construction of the questioned provision
would indicate that the word "such" in the phrase "including
offshore islands and fifteen kilometers from such coastline"
refers to the general coastline, and not to an archipelagic
municipal baseline. Coastline as defined under Rule 4.1 (a) of
the Implementing Rules and Regulations of R.A. No.
8550 "refers to the outline of the mainland shore touching the
sea at mean lower tide." x x x[34]
The OSG also cited the House of Representatives Committee
Deliberations on the 1998 Fisheries Code to show that the
intent of the lawmakers is to reckon the 15-kilometer range of
the municipal waters from the "shoreline."[35]
On August 16, 2004, PUMALU-MV, PKSK and TDCI
(collectively, the intervenors) filed a Motion for Leave to File
Intervention,[36] which the RTC granted. In their Petition-in-
Intervention,[37] the intervenors claimed that, as small fisherfolk
engaged in community-based coastal resource management,
they have substantial rights over the issue of delineation of
municipal waters.[38] They maintained that Section 4(58) of the
1998 Fisheries Code should be construed in a manner that
would give effect to the intent of delineating and delimiting
municipal waters of a municipality with or without offshore
islands. They posited that to apply the mainland principle to
municipalities with offshore islands would result in the latter's
dismemberment of their own islands or islets.[39] The intervenors
also contended that the application of the mainland principle to
municipalities with offshore islands would deny the local
government units of their water and territorial jurisdiction,
which would not be in keeping with the principle of autonomy
under the LGC.[40]
As to municipalities with offshore islands, the intervenors
averred that the archipelagic principle should be applied for
consistency and congruence of the legal framework, considering
that Article I of the 1987 Constitution adopts the archipelagic
principle.[41] They argued that the application of the archipelagic
principle in delimiting municipal waters is evident in the
previous administrative issuances of the DA through the
Bureau of Fisheries and Aquatic Resources (BFAR), namely:
Fisheries Administrative Order No. (FAO) 164,[42] and FAO 156.
[43]
The intervenors noted that in defining the municipal waters
under the regime of Presidential Decree No. 704,[44] FAO 164
and FAO 156 reckoned municipal waters of municipalities with
islands and islets from the outer shorelines of such group of
islands or islets.[45]
Finally, the intervenors revealed that after the revocation of
DAO 17, the DA issued Department Order No. 01-04[46] (DAO 1)
providing the guidelines for delineating municipal waters for
municipalities and cities without offshore islands.[47] DAO 1, in
effect, recognizes the need to distinguish between municipalities
with and without offshore islands.
In its Decision dated March 31, 2006, the RTC agreed with the
position of the OSG. It noted that the issuance of DAO 1 cited
by the intervenors does not tacitly indicate that the archipelagic
principle must be adopted as a means of delimitation or
delineation of municipal waters in municipalities or cities with
offshore islands. The RTC found an existing controversy
regarding the definition of municipal waters for municipalities
and cities with offshore islands, which the DA has yet to settle
through an administrative directive. The RTC observed that the
DA, through the OSG, opted to leave the matter of
interpretation to the court.[48] Thus, the RTC disposed of the
case in this wise:
WHEREFORE, judgment is hereby rendered declaring that in
interpreting the phrase "and a third line parallel with the
general coastline including offshore islands and fifteen (15)
kilometers from such coastline,["] the "mainland principle] and
not the "archipelagic principle" should be applied.[49]
The intervenors appealed to the CA.
In its Decision dated February 21, 2008, the CA reversed and
set aside the Decision of the RTC. According to the CA, De
Borja's petition for declaratory relief and the request for
intervention should have been dismissed due to prematurity.[50]
The CA ruled that De Borja's petition did not meet the two
requisites of a petition for declaratory relief, namely: justiciable
controversy and ripeness for judicial determination. It noted
that there is no actual case or controversy regarding the
definition of municipal waters for municipalities with offshore
islands because the DA has yet to issue guidelines with respect
to these.[51]
De Borja filed a Motion for Reconsideration with Motion for
Clarification.[52] He argued that Section 1, Rule 63 of the Rules
of Court allows any interested person to bring an action for
declaratory relief for the construction of a statute, such as the
1998 Fisheries Code. Hence, it may be the subject of a petition
for declaratory relief independent and regardless of the issuance
of implementing guidelines, since implementing rules only flow
from the statute.[53]
De Borja further asserted that the controversy is ripe for
judicial determination considering the diverse interpretations of
the parties on the scope of the phrase "and a third line parallel
with the general coastline including offshore islands and fifteen
(15) kilometers from such coastline."[54]He also claimed that the
construction of the reckoning point of the 15-kilometer range of
municipal waters under the law is, in any case, of national
importance with transcendental implications because it affects
the entire local fishing industry. He thus prayed for the CA to
relax procedural rules and take cognizance of the petition.[55]
TDCI also filed its Motion for Reconsideration[56] of the CA
Decision. It argued that the petition should have been given due
course because the issues in the case are not only novel, but
are of transcendental importance. They involve the protection of
small and marginal fisherfolk, and the delimitation of municipal
waters throughout the country for fisheries or coastal resource
management and law enforcement. TDCI prayed for the CA to
declare the archipelagic doctrine as adopted in interpreting
Section 4(58) of the 1998 Fisheries Code, with respect to
municipalities with offshore islands.[57]
PKSK, on the other hand, filed its Comment[58] to De Borja's
Motion for Reconsideration with Motion for Clarification,
praying that it be dismissed for lack of merit. PKSK insisted
that there is no actual case or controversy between the parties
as to the provisions of the 1998 Fisheries Code, and that De
Borja simply wants an interpretation by the court.[59] PKSK,
however, argued that the dismissal of the petition meant that
the archipelagic doctrine is the prevailing interpretation.[60]
In its Resolution[61] dated November 3, 2008, the CA denied De
Borja's and TDCI's motions. The CA held:
x x x At present, the DA has yet to issue guidelines for
delineating/delimiting municipal waters for municipalities and
cities with offshore islands. Since the DA still has to issue such
guidelines to carry into effect the requirement imposed by Rule
123.2 of the IRR of RA No. 8550, whatever ramifications
petitioner-appellee [De Borja] and intervenors-appellants fear
may result from the enforcement of the questioned provision of
RA No. 8550 remain to be merely hypothetical.
While this Court acknowledges the importance of the issue
raised by petitioner-appellee and intervenors-appellants in SP
Civil Action No. 04-007-MN as well as in the present case it
must be emphasized that this Court may not act upon a
hypothetical issue that has not yet ripened into a justiciable
controversy.[62] (Citations omitted.)

Thus, De Borja and TDCI filed their own petitions for review
before us, which we consolidated in our Resolution[63] dated
January 14, 2009. De Borja and TDCI both insist that the CA
erred in dismissing the petition for declaratory relief on the
ground of prematurity. They assert that only a judicial
declaration will finally settle the different interpretations of
Section 4(58) of the 1998 Fisheries Code. According to De Borja,
a petition for declaratory relief is the proper remedy for the
construction of the provision regardless of the issuance of
implementing guidelines. As for TDCI, it maintains that all the
requisites for a valid petition for declaratory relief are present.
De Borja and TDCI also both reiterate the issues' national
significance and transcendental implications to the entire local
fishing industry. They, however, differ in the principle they want
the court to uphold in interpreting Section 4(58) of the 1998
Fisheries Code, respecting municipalities of cities with offshore
islands. De Borja opines that the provision unqualifiedly adopts
only the mainland principle in defining municipal waters.
[64]
 TDCI, on the other hand, maintains that using the mainland
principle in interpreting the provision would violate the
constitutional rights of simple fisherfolk to subsistence fishing,
and of municipalities and cities with offshore islands to
meaningful autonomy in managing their resources.[65]
In its Comment[66] dated June 10, 2009, the OSG concurs with
the CA that De Borja's petition before the RTC failed to allege a
justiciable controversy. The OSG avers that the petition must
fail because it was based on mere speculations, contingent
events, and hypothetical issues that have not yet ripened into
an actual controversy.[67] Notwithstanding this position, the
OSG still submits that the mainland principle, and not the
archipelagic principle, should be adopted in defining municipal
waters under the 1998 Fisheries Code.[68]
The sole issue presented is whether De Borja's petition for
declaratory relief should prosper.
We deny the petition.
For a petition for declaratory relief[69] to prosper, it must be
shown that (a) there is a justiciable controversy, (b) the
controversy is between persons whose interests are adverse, (c)
the party seeking the relief has a legal interest in the
controversy, and (d) the issue invoked is ripe for judicial
determination.[70] We agree with the CA when it dismissed De
Borja's petition for being premature as it lacks the first and
fourth requisites. We hasten to add that the petition, in fact,
lacks all four requisites.
First, we find that De Borja's petition does not present a
justiciable controversy or the "ripening seeds" of one as to
warrant a court's intervention. A justiciable controversy is a
definite and concrete dispute touching on the legal relations of
parties having adverse legal interests, which may be resolved by
a court of law through the application of a law.[71] It must be
appropriate or ripe for judicial determination, admitting of
specific relief through a decree that is conclusive in character. It
must not be conjectural or merely anticipatory, which only
seeks for an opinion that advises what the law would be on a
hypothetical state of facts.[72]
In his five-page petition for declaratory relief, De Borja failed to
provide factual allegations showing that his legal rights were the
subject of an imminent or threatened violation that should be
prevented by the declaratory relief sought. He simply went on to
conclude that the construction or interpretation of the
reckoning point of the 15-kilometer range of municipal waters
under the 1998 Fisheries Code would affect his rights as he is
"now exposed to apprehensions and possible harassments that
may be  brought about by conflicting interpretations of the said
statute x x x."[73] As to how these apprehensions and
harassments shall come about, De Borja did not elaborate.
Clearly, therefore, there is no actual or imminent threat to his
rights which is ripe for judicial review. As we have explained
in Republic v. Roque:[74]
A perusal of private respondents' petition for declaratory
relief would show that they have failed to demonstrate how
they are left to sustain or are in immediate danger to
sustain some direct injury as a result of the enforcement of
the assailed provisions of RA 9372. Not far removed from the
factual milieu in the Southern Hemisphere cases, private
respondents only assert general interests as citizens, and
taxpayers and infractions which the government could
prospectively commit if the enforcement of the said law
would remain untrammelled. As their petition would disclose,
private respondents' fear of prosecution was solely based on
remarks of certain government officials which were addressed to
the general public. They, however, failed to show how these
remarks tended towards any prosecutorial or governmental
action geared towards the implementation of RA 9372 against
them. In other words, there was no particular, real or imminent
threat to any of them. As held in Southern Hemisphere:
Without any justiciable controversy, the petitions have become
pleas for declaratory relief, over which the Court has no original
jurisdiction. Then again, declaratory actions characterized by
"double contingency," where both the activity the petitioners
intend to undertake and the anticipated reaction to it of a
public official are merely theorized, lie beyond judicial review for
lack of ripeness.
The possibility of abuse in the implementation of RA 9372
does not avail to take the present petitions out of the realm
of the surreal and merely imagined. Such possibility is not
peculiar to RA 9372 since the exercise of any power granted
by law may be abused. Allegations of abuse must be
anchored on real events before courts may step in to settle
actual controversies involving rights which are legally
demandable and enforceable.[75] (Emphasis supplied; citations
omitted.)
De Borja neither established his legal interest in the controversy
nor demonstrated the adverse interests between him and
others. He did not even implead any respondent and merely
stated that he was engaged in fishing operations in various
fishing grounds within the internal waters of the Philippines. He
simply made a general statement that there are varying
interpretations of the reckoning point of the 15-kilometer range
of municipal waters under the 1998 Fisheries Code, without
elaborating as to what these conflicting interpretations of the
law were.
In the early case of Delumen v. Republic,[76] we concurred with
the Solicitor General's contention that a justiciable controversy
is one involving an active antagonistic assertion of a legal right
on one side and a denial thereof on the other concerning a real
and not a merely theoretical question or issue.[77] We held that
the petitioners in Delumen were not entitled to a declaratory
relief because their petition did not mention any specific person
having or claiming adverse interest in the matter. As such, they
were invoking an action for declaratory judgment solely to
determine a hypothetical, abstract, theoretical, or uncertain
claim, which we cannot allow.[78]
We stress that neither the OSG's filing of its Comment nor the
petition-in-intervention of PUMALU-MV, PKSK, and TDCI
endowed De Borja's petition with an actual case or controversy.
The Comment, for one, did not contest the allegations in De
Borja's petition. Its main role was to supply De Borja's petition
with the factual antecedents detailing how the alleged
controversy reached the court. It also enlightened the RTC as to
the two views, the mainland principle versus the archipelagic
principle, on the definition of municipal waters. Even if the
Comment did oppose the petition, there would still be no
justiciable controversy for lack of allegation that any person has
ever contested or threatened to contest De Borja's claim of
fishing rights.[79]
The petition-in-intervention, on the other hand, also did not
dispute or oppose any of the allegations in De Borja's petition.
While it did espouse the application of the archipelagic principle
in contrast to the mainland principle advocated by the OSG, it
must be recalled that De Borja did not advocate for any of these
principles at that time. He only adopted the OSG's position in
his Memorandum before the RTC. Thus, the petition-in-
intervention did not create an actual controversy in this case as
the cause of action for declaratory relief must be made out by
the allegations of the petition without the aid of on any other
pleading.[80]
Simply put, De Borja's petition does not contain ultimate facts
to support his cause of action. De Borja merely wants the court
to give him an opinion on the proper interpretation of the
definition of municipal waters. This is a prayer which we cannot
grant. Our constitutional mandate to settle only actual
controversies involving rights that are legally demandable and
enforceable[81] proscribes us from giving an advisory opinion.
Second, closely associated with the requirement of actual or
justiciable controversy is the requirement of ripeness for
adjudication. In this regard, we cite our ruling
in Lozano v. Nograles,[82] viz.:
An aspect of the "case-or-controversy" requirement' is the
requisite of "ripeness." x x x In our jurisdiction, the issue of
ripeness is generally treated in terms of actual injury to the
plaintiff. Hence, a question is ripe for adjudication when the act
being challenged has had a direct adverse effect on the
individual challenging it. An alternative road to review similarly
taken would be to determine whether an action has already
been accomplished or performed by a branch of government
before the courts may step in.[83](Emphasis and citations
omitted.)
The requisite of ripeness has a two-fold aspect: fitness of the
issues for judicial decision and the hardship to the parties
entailed by withholding court consideration.[84] The first aspect
requires that the issue tendered is a purely legal one and that
the regulation subject of the case is a "final agency action." The
second aspect mandates that the effects of the regulation are
felt in a concrete way by the challenging parties.[85] Applying
these tests, we find that De Borja's petition is not ripe for
adjudication.
The question calling for the interpretation of the definition of
municipal waters for municipalities with offshore islands
is not a purely legal question because the given set of facts
from which our interpretation will be based are not yet
complete. In other words, the question demands an agency
action from the DA. An agency action is defined in Book VII,
Chapter I, Section 2(15) of the Administrative Code of 1987[86] as
referring to the whole or part of every agency rule, order,
license, sanction, relief or its equivalent or denial thereof. As
applied here, the action required from the DA involves further
factual determination of a kind that necessitates the application
of the Department's expertise and authority, both of which we
do not have.
Under Section 123 of the 1998 Fisheries Code (now Section 157
of the 1998 Fisheries Code as amended by Republic Act No.
10654[87][hereinafter, the Amended Fisheries Code]), the DA has
the mandate to authorize the NAMRIA to designate and chart
navigational lanes in fisheries areas and to delineate municipal
waters. In the legitimate exercise of its power of subordinate
legislation, the DA issued the IRR of the Amended Fisheries
Code.[88] The IRR of the Amended Fisheries Code, particularly
Sections 157.1 to 157.4, echoes the mandate of the DA and
NAMRIA under Section 157 of the law. It provides the details
and the process of delineation of municipal waters, to wit:
Sec. 157. Charting of Navigational Lanes and Delineation of
Municipal Waters. – The Department shall authorize the
National Mapping and Resource Information Authority
(NAMRIA) for the designation and charting of navigational
lanes in fishery areas and delineation of municipal
waters. The Philippine Coast Guard shall exercise control and
supervision over such designated navigational lanes.
Rule 157.1. Delineation of Municipal Waters.  - Recognizing
that all municipal waters have not yet been delineated, the
DA-BFAR shall issue guidelines for the delineation of all
municipal waters in the Philippines following the process
stated in Rule 65.2.
Rule 157.2. Navigational Lanes. - The DA-BFAR, shall facilitate
the designation and charting of navigational lanes in fishery
areas, by convening an Inter-Agency committee composed of
NAMRIA, PN, PCG, MARINA, other concerned agencies and the
NFARMC.
Rule 157.3. Mapping.  – The DA-BFAR, in coordination with
the NAMRIA and with the participation of local government
units concerned shall determine the outer limits of the
municipal waters. Overlapping boundaries in municipal
waters shall be governed by the Rules embodied in this law
and the Local Government Code of 1991.
Rule 157.4. Navigational Charts. – Charts of navigational lane
and outer limits of municipal waters shall be produced,
published and regularly updated by NAMRIA.
Rule 157.5. Funding. – The Department, through DBM, shall
allocate sufficient funds for these purposes. (Emphasis
supplied.)
Pertinently, Rule 65.2 provides:
Rule 65.2. Formulation of Rules and Regulations. - In
formulating rules and regulations, the DA-BFAR shall observe
these principles:
a. The regulation shall be based on scientific studies. In
the conduct of scientific studies, stakeholders in the
affected region shall be informed of the conduct of
the study, its duration and the expert/s who will
conduct the same. The stakeholders may nominate
their own scientist/s to participate in the study or will
be given the chance to provide comments on the
scientist who will conduct the study;
b. The consultation shall be conducted in all affected
regions as may be practicable, taking into consideration
the safety and accessibility of the venue to the
stakeholders;
c. Stakeholders shall be given at least fifteen (15) days
prior notice of the date and venue of the
consultation including the subject matter of the
proposed regulation. The notice shall be published in a
newspaper of general circulation in the region, where
feasible; and,
 d. The proposed regulation shall be made publicly available
at the BFAR website and BFAR Regional Offices at least
seven (7) days prior to the consultation. (Emphasis
supplied.)
The DA, however, has not yet performed any of the above acts.
The record shows that no rule, regulation, or guidelines have
been issued by the DA to date, in coordination with BFAR, as
regards municipalities with offshore islands. There are serious
gaps in the implementation of the law which the DA and the
concerned agencies would still need to fill in. As it stands,
therefore, there is no agency action to speak of, much less a
"final agency action" required under the ripeness doctrine.
Equally significant, we find that if we were to grant the petition
for declaratory relief, it would mean an intrusion into the
domain of the executive, preempting the actions of the DA and
other concerned government agencies and stakeholders. As
clearly set out in the provisions of the IRR, the primary duty of
determining the reckoning point of the 15-kilometer range of
municipal waters of municipalities with offshore islands falls
with the DA, NAMRIA, and the BFAR. They shall do so through
public consultation or with the participation of stakeholders,
such as the concerned municipalities, fishing operators, and
fisherfolk.
Nonetheless, De Borja insists that a statute may be the subject
of a petition for declaratory relief regardless of the issuance of
an implementing guideline. He pleads that the "persisting and
actual confusion brought about by the different interpretations
of the interested groups in the local fishing industry is ripe for
judicial action."[89] We disagree. In Garcia v. Executive Secretary,
[90]
 we ruled that a petition assailing the constitutionality of
Republic Act No. 7042 or the Foreign Investments Act of 1991 is
not ripe for adjudication, there being "no actual case or
controversy, particularly because of the absence of the
implementing rules that are supposed to carry the Act into
effect."[91]
In Bayan Telecommunications, Inc. v. Republic,[92] we affirmed
the ruling of the CA in dismissing a petition for declaratory
relief after we found that Bayantel's fear of sanction under
Section 21 of Republic Act No. 7925[93] was merely hypothetical,
as there are yet no implementing rules or guidelines to carry
into effect the requirement imposed by the said provision.[94]
Likewise, in Lozano,[95] we noted that judicial intervention[96] was
premature because the House of Representatives has yet to
adopt rules of procedure in relation to Resolution No. 1109.[97]
Corollarily, since no implementing rule or agency action is
involved in this case, no real hardship may be felt by De Borja if
we were to withhold judicial consideration. As earlier discussed,
the petition did not state any specific right to which De Borja
was entitled, and which was threatened to be violated,
prejudiced or denied by the DA. We emphasize that court action
is discretionary in petitions for declaratory relief.[98]We may
refuse to construe the instrument, or in this case, the statute
involved, if the construction is not necessary and proper under
the circumstances and/or if the construction would not
terminate the controversy.[99] Here, the lack of a purely legal
question, the absence of agency action, and the nonexistence of
a threatened direct injury, make the construction of Section
4(58) of the 1998 Fisheries Code inappropriate and unripe for
judicial resolution at this time. We cannot give relief merely
because De Borja has a "real problem" and "a genuine need for
legal advice."[100] As aptly put in Abbott Laboratories v. Gardner:
[101]
x x x Without undertaking to survey the intricacies of the
ripeness doctrine, it is fair to say that its basic rationale is to
prevent the courts, through avoidance of premature
adjudication, from entangling themselves in abstract
disagreements over administrative policies, and also to protect
the agencies from judicial interference until an administrative
decision has been formalized and its effects felt in a concrete
way by the challenging parties. (Citation omitted.)
Considering the foregoing, the DA's decision, through the OSG,
to submit the interpretation of municipal waters to the court's
wisdom and discretion was improper. The executive cannot
simply pass the buck to the judiciary. As we have explained
in Tan v. Macapagal:[102]
x x x The doctrine of separation of powers calls for the other
departments being left alone to discharge their duties as they
see fit. The judiciary as Justice Laurel emphatically asserted
"will neither direct nor restrain executive [or legislative] action x
x x." The legislative and executive branches are not bound
to seek its advice as to what to do or not to do. Judicial
inquiry has to be postponed in the meanwhile. It is a
prerequisite that something had by then been accomplished
or performed by either branch before a court may come into
the picture, At such a time, it may pass on the validity of what
was done but only "when xxx properly challenged in an
appropriate legal proceeding."[103] (Emphasis supplied; citations
omitted.)
Finally, in their attempt to salvage the case, both De Borja and
intervenor TDCI invoked transcendental importance. However,
their contention is misplaced. The transcendental importance
doctrine dispenses only with the requirement of locus standi.
[104]
 It cannot and does not override the requirements of actual
and justiciable controversy and ripeness for adjudication, which
are conditions sine qua non for the exercise of judicial power.
WHEREFORE, the consolidated petitions are DENIED. The
February 21, 2008 Decision and November 3, 2008 Resolution
of the Court of Appeals in CA-G.R. CV No. 87391 are
hereby AFFIRMED.
SO ORDERED.
Velasco, Jr., (Chairperson), Bersamin, Reyes, and Tijam,
JJ., concur.
N O T I C E  OF  J U D G M E N T
Sirs /Mesdames:
Please take notice that on April 19, 2017 a Decision, copy
attached hereto, was rendered by the Supreme Court in the
above-entitled case, the original of which was received by this
Office on April 26, 2017 at 9:00 a.m.
Very truly yours,
WILFREDO V. LAPITAN
Clerk of Court         
By:                                                                
(SGD.) MISAEL DOMINGO C. BATTUNG III
Deputy Division Clerk of Court           
 [16]
 Id. at 91-92; 100.

 Lozano v. Nograles,  G.R. No. 187883, June 16, 2009, 589

[1] [17]
 Id. at 93-94.
SCRA 356, 357.
[18]
 Id. at 111-150.
 De Borja's Petition, rollo (G.R. No. 185320), pp. 3-27; TDCI's
[2]

Petition, rollo, (G.R. No. 185348), pp. 7-32.

[19]
 Guidelines for Delineating/Delimiting Municipal Waters.

 Rollo (G.R. No. 185320), pp. 30-42; penned by Associate

[3] [20]
 Rollo (G.R. No. 185320), p. 94.
Justice Hakim S. Abdulwahid and concurred in by Associate
Justices Jose C. Reyes, Jr. and Arturo G. Tayag.
[21]
 Id. at 94-95.

[4]
 Id. at 44-49.  Sec. 123. Charting of Navigational Lanes and Delineation of
[22]

Municipal Waters. – The Department shall authorize the

[5]
 Id. at 172-184. National Mapping and Resource Information Authority
(NAMRIA) for the designation and charting of navigational lanes
[6]
 Id. at 41. in fishery areas and delineation of municipal waters. The
Philippine Coast Guard shall exercise control and supervision
[7]
 Id. at 84-89. over such designated navigational lanes.

[8]
 DA Administrative Order No. 3 (1998).
[23]
 Rollo (G.R. No. 185320), p. 96.

[9]
 Rollo (G.R. No. 185320), pp. 86-87.
[24]
 Id. at 96-98.

[10]
 Id.
[25]
 Id. at 97.

[11]
 Records, p. 81.
[26]
 Id. at  101-102.

[12]
 Id. at 82.
[27]
 Id. at 105-106.

[13]
 Id. at 88-105.
[28]
 Id. at 106.

[14]
 Id. at 91.
[29]
 Revocation of Administrative Order 17, Series of 2001.

[15]
 Id. at 94-95.
[30]
 Rollo (G.R. No. 185320), pp. 108-110.
 effect 15 days thereafter.
[31]
 Id. at 108-109.
[47]
 Rollo (G.R. No. 185320), p. 131.
[32]
 Id. at 111-112.
[48]
 Id. at 180-184.
[33]
 Id. at 116-117.
[49]
 Id. at 184.
[34]
 Id. at 120.
[50]
 Id. at 41.
[35]
 Id. at 120-127.
[51]
 Id. at 40.
[36]
 Records, pp. 186-190.
[52]
 Id. at 295-309.
[37]
 Rollo (G.R.  No. 185320), pp. 130-149.
[53]
 Id. at 299.
[38]
 Id. at 131.
[54]
 Id. at 302.
[39]
 Id. at 134-135.
[55]
 Id. at 303.
[40]
 Id. at 137.
[56]
 Id. at 310-316.
[41]
 Id. at 136-138.
[57]
 Id. at 312.
 Rules and Regulations Governing the Operation of "Hulbot-
[42]

Hulbot" in the Philippine Waters (1987). [58]

 CA rollo, pp. 292-299.

 Guidelines and Procedure in the Effective Implementation of

[43] [59]
 Id. at 294.
LOI No. 1328 (1986).
[60]
 Id. at 295-296.
[44]
 Fisheries Decree of 1975.
[61]
 Rollo (G.R. No. 185320), pp. 44-49.
[45]
 Rollo (G.R. No. 185320), pp. 138-139.
[62]
 Id. at 48.
 Guidelines for Delineating/Delimiting Municipal Waters for
[46]

Municipalities and Cities Without Offshore Islands. Dated [63]

 Id. at 317-318.
January 14, 2004, published on January 24, 2004 and took
[64]
 Id. at 18-20.
[74]
 G.R. No. 204603, September 24, 2013, 706 SCRA 273.
[65]
 Rollo (G.R. No. 185348), pp. 21-27.
[75]
 Id. at 284-285.
[66]
 Rollo (G.R. No. 185320), pp. 357-404.
[76]
 94 Phil. 287 (1954).
[67]
 Id. at 381-383.
[77]
 Id. at 288-289.
[68]
 Id. at 383.
[78]
 Id. at 289.
 RULES OF COURT, Rule 63, Sec. 1. Who may file petition. —
[69]

Any person interested under a deed, will, contract or other [79]

 See Obiles v. Republic, 92 Phil. 864 (1953)
written instrument, or whose rights are affected by a statute,
executive order or regulation, ordinance, or any other [80]
 See Delumen v. Republic, supra at 289.
governmental regulation may, before breach or violation thereof
bring an action in the appropriate Regional Trial Court to [81]
 CONSTITUTION, Art. VIII, Sec. 1.
determine any question of construction or validity arising, and
for a declaration of his rights or duties, thereunder. [82]
 G.R. No. 187883, June 16, 2009, 589 SCRA 356.

 Bayan Telecommunications, Inc. v. Republic,  G.R. No.

[70] [83]
 Id. at 358-359.
161140, January 31, 2007, 513 SCRA 562, 568, citing Office of
the Ombudsman v. Ibay, G.R. No. 137538, September 3, 2001,  Id. at 359, citing Abbott Laboratories v. Gardner, 387 U.S.
[84]

364 SCRA 281, 286. 136 (1967).

 Bayan Telecommunications, Inc. v. Republic, supra at 568,

[71]
 National Automatic Laundry and Cleaning Council v.
[85]

citing Cularan v. Department of Environment and Natural Shultz, 443 F.2d 689 (1971), citing Abbott Laboratories v.
Resources,  G.R. No. 134958, January 31, 2001, 350 SCRA Gardner, supra.
697, 704-705.
[86]
 Executive Order No. 292.
 See Republic of the Philippines v. Roque, G.R. No. 204603,
[72]

September 24, 2013, 706 SCRA 273, 284, citing Velarde v.  An Act to Prevent, Deter and Eliminate Illegal, Unreported
[87]

Social Justice Society, G.R. No. 159357, April 28, 2004, 428
SCRA 283, 291; and Guingona, Jr. v. Court of Appeals, G.R. No.
125532, July 10, 1998, 292 SCRA 402, 413-414.
[73]
 Rollo (G.R. No. 185320), pp. 86-87; emphasis ours.
and Unregulated Fishing, Amending Republic Act No. 8550,
Otherwise Known as "The Philippine Fisheries Code of 1998"
(2015).
[88]
 DA Administrative Order No. 10 (2015).
[89]
 Rollo (G.R. No. 185320), p. 13. [103]
 Id. at 681.
[90]
 G.R. No. 100883, December 2, 1991, 204 SCRA 516.  Southern Hemisphere Engagement Network, Inc. v. Anti-
[104]

Terrorism Council, G.R. No. 178552, October 5, 2010, 632 SCRA

[91]
 Id. at 522. 146, 168, citing Chavez v. Presidential Commission on Good
Government,  G.R. No. 130716. December 9, 1998, 299 SCRA
[92]
 G.R. No. 161140, January 31, 2007, 513 SCRA 562. 744.

 Public Telecommunications Policy Act of the Philippines

[93]

(1995).
[94]
 Bayan Telecommunications, Inc. v. Republic, supra at 568.
[95]
 Supra note 82.

 Petitioners, in Lozano, called for the nullification of House

[96]

Resolution No. 1109. Source: Supreme Court E-Library | Date created: July 15,
2019 
 A Resolution Calling Upon the Members of Congress to
[97] This page was dynamically generated by the E-Library Content
Convene for the Purpose of Considering Proposals to Amend or Management System
Revise the Constitution, Upon a Three-fourths Vote of All the
Members of Congress, Fourteenth Congress.
Supreme Court E-Library
 Chan v. Galang, G.R No. L-21732, October 17, 1966, 18
[98]

SCRA 345, 351.

[99]
 See RULES OF COURT, Rule 63, Sec. 5.

 National Automatic Laundry and Cleaning Council v.

[100]

Shultz, 443 F.2d 689 (1971), citing F. W. Maurer & Sons Co. v.

Andrews, 30 F. Supp. 637, 638 (E.D. Pa. 1939).
[101]
 387 U.S. 136 (1967).
[102]
 G.R. No. L-34161, February 29, 1972, 43 SCRA 677.

807 Phil. 153
FIRST DIVISION
[ A.C. No. 5333, March 13, 2017 ]
ROSA YAP PARAS, COMPLAINANT, V. JUSTO DE
JESUS PARAS, RESPONDENT.  2001, thereby violating the suspension order.[8] On March 26,
RESOLUTION
PERLAS-BERNABE, J.:  June 8, 2001[11] and August 21, 2001[12] raising the same
This administrative case stemmed from the disbarment
complaint[1] (1995 complaint) filed by Rosa Yap Paras
(complainant) against her husband Justo de Jesus Paras
(respondent) for which he was suspended from the practice of
law for a year. The issues before the Court now are (a) whether
respondent should be held administratively liable for allegedly
violating his suspension order and (b) whether his suspension
should be lifted.
The Facts
In a Decision[2] dated October 18, 2000, the Court suspended
respondent from the practice of law for six (6) months for
falsifying his wife's signature in bank documents and other
related loan instruments, and for one (1) year for immorality
and abandonment of his family, with the penalties to be served
simultaneously.[3] Respondent moved for reconsideration[4] but
the Court denied it with finality in a Resolution[5] dated January
22, 2001.
On March 2, 2001, complainant filed a Motion[6] to declare in
contempt and disbar respondent and his associate, Atty.
Richard R. Enojo (Atty. Enojo), alleging that respondent
continued to practice law, and that Atty. Enojo signed a
pleading prepared by respondent, in violation of the suspension
order.[7] Moreover, complainant claimed that respondent
appeared before a court in Dumaguete City on February 21,
2001, complainant filed a second motion for contempt and
disbarment,[9] claiming that, on March 13, 2001, Atty. Enojo
again appeared for Paras and Associates, in willful disobedience
of the suspension order issued against respondent.
[10]
 Complainant filed two (2) more motions for contempt dated
arguments. Respondent and Atty. Enojo filed their respective
comments,[13] and complainant filed her replies[14] to both
comments. Later on, respondent filed a Motion to Lift
Suspension[15] dated May 27, 2002, informing the Court that he
completed the suspension period on May 22, 2002. Thereafter,
respondent admitted that he started accepting new clients and
cases after the filing of the Motion to Lift Suspension.[16] Also,
complainant manifested that respondent appeared before a
court in an election case on July 25, 2002 despite the pendency
of his motion to lift suspension. In view of the foregoing, the
Court referred the matter to the Integrated Bar of the
Philippines (IBP) for report and recommendation.[17]
On March 26, 2003, complainant filed an Ex-Parte Motion for
Clarificatory Order[18] on the status of respondent' suspension,
essentially inquiring whether respondent can resume his
practice prior to the Court's order to lift his suspension.
[19]
 Meanwhile, the Office of the Bar Confidant (OBC) received
the same inquiry through a Letter[20] dated March 21, 2003
signed by Acting Municipal Circuit Trial Court (MCTC) Judge
Romeo Anasario of the Second MCTC of Negros Oriental.
Accordingly, the Court referred the foregoing queries to the OBC
for report and recommendation.[21]
In a Report and Recommendation[22] dated June 22, 2004, the
OBC recommended that the Court issue an order declaring that
respondent cannot engage in the practice of law until his
suspension is ordered lifted by the Court.[23] Citing case law, the
OBC opined that the lifting of a lawyer's suspension is not
automatic upon the end of the period stated in the Court's
decision and an order from the Court lifting the suspension is
necessary to enable him to resume the practice of his
profession. In this regard, the OBC noted that: (a) respondent's
suspension became effective on May 23, 2001 upon his
receipt of the Court resolution denying his motion for
reconsideration with finality; and (b) considering that the
suspensions were to be served simultaneously, the period of
suspension should have ended on May 22, 2002.[24] To date,
however, the Court has not issued any order lifting the
suspension.
Soon thereafter, in a Resolution[25] dated August 2, 2004, the
Court directed the IBP to submit its report and recommendation
on the pending incidents referred to it. Since no report was
received until 2013, the Court was constrained to issue a
Resolution[26] dated January 20, 2014, requiring the IBP to
submit a status report regarding the said incidents. In
response, the IBP-Commission on Bar Discipline sent a
letter[27] to the Court, conveying that the Board of Governors
had passed a Resolution dated April 15, 2013 affirming
respondent's suspension from the practice of law.[28] However, in
view of the pendency of respondent's motion for reconsideration
before it, the IBP undertook to transmit the case records to the
Court as soon as said motion is resolved.[29] Thereafter, in a
letter[30] dated September 22, 2015, the IBP advised the Court
that it denied respondent's motion for reconsideration. The
Court received the records and relevant documents only on
February 15, 2016.[31]
The IBP's Report and Recommendation
In the Report and Recommendation[32] dated January 16, 2012,
instead of resolving only the pending incidents referred to the
IBP, the IBP Investigating Commissioner examined anew the
1995 complaint filed against respondent which had been
resolved with finality by the Court in its Decision dated October
18, 2000 and Resolution dated January 22, 2001. The
Investigating Commissioner recommended that respondent be
suspended from the practice of law for two (2) years for
falsifying his wife's signature in the bank loan documents and
for immorality.[33]
In a Resolution[34] dated April 15, 2013, the IBP Board of
Governors adopted and approved the Report and
Recommendation dated January 16, 2012, with modification
decreasing the recommended penalty to suspension from the
practice of law for one (1) year.[35] Aggrieved, respondent Filed a
motion for reconsideration,[36] alleging that his administrative
liability based on the charges in the 1995 complaint had been
settled more than a decade ago in the Court's Decision dated
October 18, 2000. He added that to suspend him anew for
another year based on the same grounds would constitute
administrative double jeopardy. He stressed that the post-
decision referral of this case to the IBP was limited only to
pending incidents relating to the motion to declare him in
contempt and his motion to lift the suspension. Such motion
was, however, denied in a Resolution dated June 7, 2015.[37]
The Issues Before the Court
The core issues in this case are: (a) whether respondent should
be administratively held liable for practicing law while he was
suspended; and (b) whether the Court should lift his
suspension.
The Court's Ruling
At the outset, the Court notes that the instant matters referred
to the IBP for investigation, report, and recommendation pertain
to respondent's alleged violation of the suspension order and
his request for the Court to lift the suspension order. However,
the IBP Investigating Commissioner evidently did not dwell on
such matters. Instead, the IBP Investigating Commissioner
proceeded to determine respondent's liability based on the 1995
complaint filed by herein complainant – which was already
resolved with finality by no less than the Court itself. To make
things worse: (a) the IBP Board of Governors failed to see the
IBP Investigating Commissioner's mishap, and therefore,
erroneously upheld the latter's report and recommendation; and
(b) it took the IBP more than a decade to resolve the instant
matters before it. Thus, this leaves the Court with no factual
findings to serve as its basis in resolving the issues raised
before it.
Generally, the IBP's formal investigation is a mandatory
requirement which may not be dispensed with, except for valid
and compelling reasons,[38] as it is essential to accord both
parties an opportunity to be heard on the issues raised.
[39]
 Absent a valid fact-finding investigation, the Court usually
remands the administrative case to the IBP for further
proceedings.[40] However, in light of the foregoing circumstances,
as well as respondent's own admission that he resumed
practicing law even without a Court order lifting his suspension,
the Court finds a compelling reason to resolve the matters
raised before it even without the IBP's factual findings and
recommendation thereon.
According to jurisprudence, the "practice of law embraces any
activity, in or out of court, which requires the application of law,
as well as legal principles, practice or procedure[,] and calls for
legal knowledge, training[,] and experience."[41] During the
suspension period and before the suspension is lifted, a lawyer
must desist from practicing law.[42] It must be stressed,
however, that a lawyer's suspension is not automatically lifted
upon the lapse of the suspension period.[43] The lawyer must
submit the required documents and wait for an order from the
Court lifting the suspension before he or she resumes the
practice of law.[44]
In this case, the OBC correctly pointed out that respondent's
suspension period became effective on May 23, 2001 and lasted
for one (1) year, or until May 22, 2002. Therafter, respondent
filed a motion for the lifting of his suspension. However, soon
after this filing and without waiting for a Court order approving
the same, respondent admitted to accepting new clients and
cases, and even working on an amicable settlement for his
client with the Department of Agrarian Reform.[45] Indubitably,
respondent engaged in the practice of law without waiting for
the Court order lifting the suspension order against him, and
thus, he must be held administratively liable therefor.
Under Section 27, Rule 138 of the Rules of Court, willful
disobedience to any lawful order of a superior court and
willfully appearing as an attorney without authority to do so –
acts which respondent is guilty of in this case – are grounds for
disbarment or suspension from the practice of law,[46] to wit:
Section 27. Disbarment or suspension of attorneys by Supreme
Court; grounds therefor. — A member of the bar may be
disbarred or suspended from his office as attorney by the
Supreme Court for any deceit, malpractice, or other gross
misconduct in such office, grossly immoral conduct, or by
reason of his conviction of a crime involving moral turpitude, or
for any violation of the oath which he is required to take before
admission to practice, or for a willful disobedience of any
lawful order of a superior court, or for corruptly or willfully
appearing as an attorney for a party to a case without
authority so to do. The practice of soliciting cases at law for
the purpose of gain, either personally or through paid agents or
brokers, constitutes malpractice. (Emphases and underscoring
supplied)
Anent the proper penalty to be imposed on respondent,
prevailing case law[47] shows that the Court consistently
imposed an additional suspension of six (6) months on lawyers
who continue practicing law despite their suspension. Thus, an
additional suspension of six (6) months on respondent due to
his unauthorized practice of law is proper. The Court is
mindful, however, that suspension can no longer be imposed on
respondent considering that just recently, respondent had
already been disbarred from the practice of law and his name
had been stricken off the Roll of Attorneys in Paras v. Paras.
[48]
 In Sanchez v. Torres,[49] the Court ruled that the penalty of
suspension or disbarment can no longer be imposed on a
lawyer who had been previously disbarred.[50] Nevertheless, it
resolved the issue on the lawyer's administrative liability for
recording purposes in the lawyer's personal file in the OBC.
Hence, the Court held that respondent therein should be
suspended from the practice of law, although the said penalty
can no longer be imposed in view of his previous disbarment. In
the same manner, the Court imposes upon respondent herein
the penalty of suspension from the practice of law for a period
of six (6) months, although the said penalty can no longer be
effectuated in view of his previous disbarment, but nonetheless
should be adjudged for recording purposes. That being said, the
issue anent the propriety of lifting his suspension is already
moot and academic.
As for Atty. Enojo, complainant insists that by signing a
pleading dated February 21, 2001[51] and indicating therein the
firm name Paras and Associates, Atty. Enojo conspired with
respondent to violate the suspension order.
Complainant's contention is untenable.
As a lawyer, Atty. Enojo has the duty and privilege of
representing clients before the courts. Thus, he can sign
pleadings on their behalf. The Court cannot give credence to
complainant's unsubstantiated claim that respondent prepared
the pleading and only requested Atty. Enojo to sign it.
Furthermore, the pleading averted to by complainant was dated
February 21, 2001, when respondent's suspension was not yet
effective. Thus, the contempt charge against Atty. Enojo must
be denied for lack of merit.
As a final note, the Court reminds the IBP to meticulously,
diligently, and efficiently act on the matters referred to it for
investigation, report, and recommendation, and to submit its
report with reasonable dispatch so as to ensure proper
administration of justice. Any inordinate delay cannot be
countenanced.
WHEREFORE, respondent Justo de Jesus Paras is hereby
found GUILTY of violating Section 27, Rule 138 of the Rules of
Court. Accordingly, he is SUSPENDED from the practice of law
for a period of six (6) months. However, considering that
respondent has already been previously disbarred, this penalty
can no longer be imposed.
The motion to declare Atty. Richard R. Enojo in contempt
is DENIED for lack of merit.
Let a copy of this Resolution be furnished the Office of the Bar [10]
 Id. at 687.
Confidant to be appended to respondent's personal record as a
member of the Bar. Likewise, let copies of the same be served  See Third Motion for Contempt and Motion for Disbarment;
[11]

on the Integrated Bar of the Philippines and the Office of the id. at 695-699.
Court Administrator, which is directed to circulate them to all
courts in the country for their information and guidance.  See Fourth Motion for Contempt and to Declare Respondent
[12]

as Disbarred; id. at 721-723.

SO ORDERED.
 See Comment dated September 25, 2001 filed by respondent
[13]

Sereno, C.J., (Chairperson), Leonardo-De Castro, Del Castillo, and Comment dated October 5, 2001 filed by Atty. Enojo; id. at
and Caguioa, JJ., concur.  741-753 and 774-784, respectively.

 See Reply to Comment of Respondent Atty. Richard R. Enojo

[14]
[1]
 Dated April 25, 1995. Rollo, Vol. I, pp. 1-19. dated October 10, 2001 and Reply to Comment Dated
September 25, 2001 dated October 5, 2001; id. at 802-804 and
[2]
 397 Phil. 462 (2000). See also rollo, Vol. I, pp. 608-626. 808-815, respectively.

[3]
 Id. at 475-476. [15]
 Id. at 820-821.

 See motion for reconsideration dated November 28,

[4] [16]
 See id. at 903.
2000; rollo, Vol. I, pp. 509-515.
 See Resolutions dated December 10, 2001, September 18,
[17]
[5]
 Id. at 517. 2002, and October 14, 2002; See id. at 819, 925, and 983-984,
respectively.
 See Motion to Declare Atty. Justo J. Paras and Atty. Richard
[6]

R. Enojo in Contempt and to Order Them Disbarred dated [18]

 Dated March 6, 2003. Rollo, Vol. II, pp. 1604-1606.
March 1, 2001; id. at 668-675.
[19]
 See id. at 1606.
[7]
 See id. at 673-673A.
[20]
 Id. at 1614-1615.
[8]
 See id. at 673.
[21]
 See Resolution dated July 7, 2003; id. at 1619.
[9]
 Dated March 15, 2001. Id. at 686-689.
  Id. at 1623-1625. Penned by Court Attorney III Mercedita C.
[22]
 See Motion for Reconsideration with Manifestation in
[36]

Cariño, reviewed by Assistant Bar Confidant Corazon G. Ferrer- Accordance with Supreme Court Circular 04-94 and Motion for
Flores, and approved by Deputy Clerk of Court and Bar Consolidation (with Leave of Court) dated September 4, 2015;
Confidant Ma. Cristina B. Layusa. id. at 3559-3571.

[23]
 Id. at 1625.  See Notice of Resolution Resolution No. XXI-2015-479*
[37]

signed National Secretary Nasser A. Marohomsalic; id. at 3584.

[24]
 Id. at 1624.
 Villanueva v. Deloria, 542 Phil. 1, 6 (2007), citing Baldomar
[38]

[25]
 Id. at 1626. v. Paras, 401 Phil. 370, 373-375 (2000).

[26]
 Rollo, Vol. VI, pp. 3266-3268.  See Arandia v. Magalong, 435 Phil. 199, 202-203 (2002),
[39]

citing Baldomar v. Paras, id. at 373-374; further citation

[27]
 Dated March 5, 2014. Id. at 3269. omitted.

[28]
 Id.  See Baldomar v. Paras, id. at 373-375. See also Delos Santos
[40]

v. Robiso, 423 Phil. 515, 519-522 (2001).

[29]
 Id.
 J.K. Mercado and Sons Agricultural Enterprises, Inc. v. De
[41]

Vera, 422 Phil. 583, 591-592 (2001).

[30]
 Id. at 3556.
[42]
 See Lingan v. Calubaquib, 737 Phil. 191, 193 (2014).
[31] 
See id. at 3579.
 See guidelines for lifting an order suspending a lawyer from
[43]
 Id. at 3587-3592. Signed by Commissioner Oliver A.
[32]
the practice of law; Maniago v. De Dios, 631 Phil. 139, 145-146
Cachapero. (2010).
[33]
 See id. at 3590-3592.  See id. See also Ibana-Andrade v. Paita-Moya, A.C. No. 8313,
[44]

July 14, 2015, 762 SCRA 571, 577-578;

 See Notice of Resolution in Resolution No. XX-2013-421
[34]

signed by Acting Secretary for the Meeting Dennis A. B. Funa; [45]

 Rollo, Vol. I, p. 903.
id. at 3586.
[46]
 See Eustaquio v. Navales, A.C. No. 10465, June 8, 2016.
[35]
 Id.
  See id. See also Ibana-Andrade v. Paita-Moya, supra note
[47]

44; Feliciano v. Bautizta-Lozada, A.C. No. 7593, March 11,

2015, 752 SCRA 245; Lingan v. Calubaquib, supra note 42;
and Molina v. Magat, 687 Phil. 1 (2012).

[48]
 See A.C. No. 7348, September 27, 2016.

[49]
 A.C. No. 10240, November 25, 2014, 741 SCRA 620.

[50]
 See id. at 627.

 See Comment on Omnibus Motion of Plaintiff filed before the

[51]

Metropolitan Trial Court in Cities signed by Atty. Enojo; rollo,

Vol. I, p. 684.

Source: Supreme Court E-Library | Date created: November 28,

2018 
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807 Phil. 183
THIRD DIVISION
[ G.R. No. 193987, March 13, 2017 ]
LAND BANK OF THE PHILIPPINES, PETITIONER, VS. PHIL-
AGRO INDUSTRIAL CORPORATION, RESPONDENT.
DECISION
REYES, J.:  property, sales and holding prices of similar land, and highest
Before this Court is a Petition for Review on Certiorari[1] seeking
to annul and set aside the Amended Decision[2] dated September
30, 2010 of the Court of Appeals (CA) in CA-G.R. CV No. 75045-
MIN, which ordered the Land Bank of the Philippines
(petitioner) to pay Phil-Agro Industrial Corporation (respondent)
the total amount of P11,640,730.68 plus interests.
The Facts
The subject of this petition is 19 parcels of land situated in
Baungon, Bukidnon, with an aggregate area of 267.0043
hectares, registered under the name of the respondent. These
landholdings were then placed under the compulsory coverage
of the Comprehensive Agrarian Reform Program (CARP) by the
Department of Agrarian Reform (DAR). The petitioner offered an
initial valuation of P2,139,996.57 for the subject landholdings
but this offer was rejected by the respondent. A summary
hearing was then conducted before the DAR Adjudication Board
for the valuation of the subject landholdings.[3]
On January 4, 1999, the respondent filed an Amended
Complaint against the DAR Secretary and the petitioner before
the Regional Trial Court (RTC) praying for the fixing and
payment of not less than P26,700,000.00 as just compensation.
[4]
On June 7, 2000, the parties agreed to the creation of a
commission to determine the fair market value of the subject
landholdings.[5]
The respondent's nominated commissioner submitted the
amount of P63,045,000.00 based on the findings of the Asian
Appraisal Company, Inc., which used the following valuation
factors of the CARP: extent, character and utility of the
and best use of the property.[6]
On the other hand, using as basis the Revised Rules and
Regulations Governing the Valuation of Land Voluntarily
Offered or Compulsory Acquired Pursuant to Republic Act (R.A.)
No. 6657,[7] the petitioner's nominated commissioner submitted
a lower amount of P11,640,730.68.[8]
The Chairman of the Commission, however, appraised the
subject landholdings in the amount of P20,589,373.00 on the
basis of the following factors: physical attributes of the subject
landholdings, soil type, terrain, adaptability to various crops,
accessibility to roads and properties in the area, and expert
opinions of the Municipal Assessor, Municipal Treasurer and
Municipal Agriculturist of Baungon, Bukidnon.[9]
On November 21, 2001, the RTC rendered its judgment
adopting the Chairman's report assessing the value of the
subject landholdings at P20,589,373.00.[10]
On appeal, the CA modified the trial court's ruling by reducing
the amount to be paid by the petitioner from P20,589,373.00 to
P11,640,730.68, thereby adopting the submitted valuation of
the petitioner's nominated commissioner.[11] The dispositive
portion of the decision reads:
WHEREFORE, the assailed Decision is MODIFIED to read as
follows:
1. Ordering [the petitioner] to pay [the respondent]
P11,640,730.68 as just compensation for the subject property;
2. Ordering [the petitioner] to pay 6% interest per annum on the
amount of just compensation as well as 12% legal interest on
the amount of just compensation plus the 6% interest, counted
from September 16, 1992, until all the amounts are fully paid;
3. The award for attorney's fees and costs of litigation to [the
respondent] is denied.
SO ORDERED.[12]
The CA ruled that the RTC had no liberty to disregard the
guidelines set forth in Section 17[13] of R.A. No. 6657 and that
the valuation report approved by the RTC was computed
without considering the valuation formula under DAR
Administrative Order (A.O.) No. 5, series of 1998.[14] The CA
found that the petitioner's commissioner used the pertinent
data from the Department of Agriculture and the Bureau of
Agricultural Statistics, and computed the value of the subject
landholdings in accordance with the formula under the said
DAR A.O. No. 5, series of 1998.[15]
The CA further ruled that there was delay in the payment of
just compensation reckoned from the date of compensable
taking on September 16, 1992, the date when the Certificates of
Land Ownership Award (CLOA) were issued in the name of
three farmer beneficiaries associations; hence, the CA awarded
interest of 6% per annum as damages for the delay, plus 12%
legal interest per annum on the amount of such compensation.
[16]
Thereafter, both the petitioner and the respondent filed a
Motion for Partial Reconsideration[17] and a Motion for
Reconsideration,[18]respectively.
On September 30, 2010, the CA rendered an Amended
Decision,[19] the dispositive portion of which is as follows:
WHEREFORE, premises foregoing, the [respondent's] motion for
reconsideration is hereby DENIED for lack of merit. On the
other hand, [the petitioner's] motion for partial reconsideration
is GRANTED. Consequently, our August 27, 2008 Decision
is MODIFIED as follows:
1. Ordering [the petitioner] to pay [the respondent]
P11,640,730.68 as just compensation for the subject
property;
2. Ordering [the petitioner] to pay 1% interest per annum
on the amount of just compensation counted from
September 16, 1992, until all the amounts are fully
paid;
3. Ordering [the petitioner] to pay 12% legal interest per
annum on the amount of just compensation plus the 1%
interest, from the finality of this Decision until full
payment thereof;
4. The award for attorney's fees and costs of litigation to
[the respondent] is denied.
SO ORDERED.[20]
In amending its previous decision, the CA explained that:
Indeed, a second look at our Decision reveals that the 6%
interest per annum on the amount of just compensation as well
as the 12% legal interest on the amount of just compensation
plus the 6% interest, counted from the time of taking, was
erroneously granted. Records show that after the taking of the
subject properties] and before [the respondent's] title thereto
was cancelled, [the petitioner] already made a deposit of its
original valuation in the amount of P2,139,996.57 in favor of
[the respondent] in the form of cash and bonds. Hence, no delay
can be attributed to it. While the court a quo directed [the
petitioner] to pay its adjudged amount within thirty (30) days
from the time its decision was rendered, and while [the
petitioner] did not pay within the period given, such failure to
pay did not tantamount to a delay in payment on the ground
that the said decision was timely assailed in the instant appeal.
x x x Moreover, it was likewise an error to have directed that the
12% legal interest be counted from the time of the taking. The
same should commence to run from the date of finality of our
decision until its full payment, in accordance with the law and
jurisprudence.[21]
Unsatisfied, the petitioner filed the instant petition before this
Court.
The Issue
The sole issue raised by the petitioner is the propriety of the
award of 1% per annum on the amount of just compensation
counted from September 16, 1992.
Ruling of the Court
The petition is partly granted.
At the outset, it bears to emphasize that there is no question
raised with respect to the amount of P11,640,730.68 as just
compensation adjudged by the appellate court. The main issue
raised by the petitioner centers on the core question of whether
the award of 1% per annum, allegedly to cover for the increase
in value of real properties, is proper. Meanwhile, the respondent
had already acquiesced with the said valuation. It, however,
lamented on the fact that it has not yet received the full and
just compensation for the subject landholdings which have
been taken from it since 1992.
In an analogous case of National Power Corporation v. Elizabeth
Manalastas and Bea Castillo,[22] where the bone of contention is
the inclusion of the inflation rate of the Philippine Peso in
determining the just compensation due to therein respondents,
the Court ruled that valuation of the land for purposes of
determining just compensation should not include the inflation
rate of the Philippine Peso because the delay in payment of the
price of expropriated land is sufficiently recompensed through
payment of interest on the market value of the land as of the
time of taking from the landowner.[23]
The rationale for imposing the interest is to compensate the
respondent for the income it would have made had it been
properly compensated for its properties at the time of the
taking.[24] The need for prompt payment and the necessity of the
payment of interest is to compensate for any delay in the
payment of compensation for property already taken.[25]
The award of interest is imposed in the nature of damages for
delay in payment which makes the obligation on the part of the
government one of forbearance to ensure prompt payment of
the value of the land and limit the opportunity loss of the
owner.[26] Therefore, there is no need for the payment of 1%
interest per annum to cover for the increase in value of real
properties.
Nonetheless, the Court observes that the CA erred as to the
reckoning point on which the award of legal interest of 12%
should accrue.
The Court takes note of the fact that in the petitioner's motion
for partial reconsideration, it contended that the 12% legal
interest should not be counted from the time of the taking,
considering the absence of delay when it promptly deposited the
initial valuation for the subject landholdings after the taking of
the same and before the respondent's title thereto was
cancelled.
Notably, while the petitioner claimed that it deposited the initial
valuation in the amount of P2,139,996.57, the said amount is
way below the just compensation finally adjudged by the CA at
P11,640,730.68. Clearly, delay in payment occurred and cannot
at all be disputed. The respondent was deprived of its lands
since September 16, 1992, when CLOAs were issued in the
name of three farmer beneficiaries associations, and to date,
had not yet received full payment of the principal amount due
to it. Evidently, from September 16, 1992 until the present, or
after almost 25 years, the respondent is deprived of just
compensation which therefore warrants the imposition of
interest.
It is doctrinal that to be considered as just, the compensation
must be fair and equitable, and the landowners must have
received it without any delay. The requirement of the law is not
satisfied by the mere deposit with any accessible bank of the
provisional compensation determined by it or by the DAR, and
its subsequent release to the landowner after compliance with
the legal requirements set forth by R.A. No. 6657.[27]
The amount allegedly deposited by the petitioner was only a
partial payment that amounted to almost 18% of the actual
value of the subject landholdings. It could be the basis for the
immediate taking of the subject landholdings but by no stretch
of the imagination can said nominal amount be considered
substantial enough to satisfy the full requirement of just
compensation, taking into account its income potential and the
foregone income lost because of the immediate taking.
Notwithstanding the fact that the petitioner had immediately
deposited the initial valuation of the subject landholdings after
its taking, the fact remains that up to this date, the respondent
has not yet been fully paid. Thus, the respondent is entitled to
legal interest from the time of the taking of the subject
landholdings until the actual payment in order to place it in a
position as good as, but not better than, the position that it was
in before the taking occurred. The imposition of such interest is
to compensate the respondent for the income it would have
made had it been properly compensated for the properties at
the time of the taking.[28]
In the recent case of Land Bank of the Philippines v. Alfredo
Hababag, Sr.,[29] the Court reiterated its ruling in Apo Fruits
Corp., et al. v. Land Bank of the Philippines,[30] that the
substantiality of the payments made by therein petitioner is not
the determining factor in the imposition of interest as nothing
less than full payment of just compensation is required. The
value of the landholdings themselves should be equivalent to
the principal sum of the just compensation due, and that
interest is due and should be paid to compensate for the unpaid
balance of this principal sum after the taking has been
completed.[31]
As to the proper reckoning point of the legal interest, it is
fundamental that just compensation should be determined at
the time of the property's taking. Here, the date of the taking of
the subject landholdings for purposes of computing just
compensation should be reckoned from the issuance dates of
the CLOA. A CLOA is a document evidencing ownership of the
land granted or awarded to the beneficiary by the DAR, and
contains the restrictions and conditions provided for in R.A. No.
6657 and other applicable laws.[32] Since the CLOA in this case
had been issued on September 16, 1992, the just compensation
for the subject landholdings should then be reckoned
therefrom, being considered the time of taking. This is based on
the principle that interest runs as a matter of law and follows
from the right of the landowner to be placed in as good position Velasco, JR., (Chairperson), Bersamin, Jardeleza, and Tijam, JJ.,
as money can accomplish, as of the date of the taking.[33] concur.

In sum, the respondent has waited too long before the petitioner
could fully pay the amount of just compensation due to it. It is
clear that the respondent voluntarily offered its subject April 3, 2017
landholdings to be included in the CARP. The respondent
submitted to expropriation and surrendered its landholdings. NOTICE OF JUDGMENT
Although it initially contested the valuation that the government
made, the respondent accepted the amount finally fixed by the Sirs / Mesdames:
appellate court. From the time of taking on September 16, 1992
to the present, it has already been 25 years but the respondent Please take notice that on March 13, 2017 a Decision, copy
has not yet received the full amount of just compensation that
attached hereto, was rendered by the Supreme Court in the
was due. Thus, the long delay entitles them to the payment of
interest to compensate for the loss of income due to the taking. above-entitled case, the original of which was received by this
Office on April 3, 2017 at 2:30 p.m. 
WHEREFORE, the petition is PARTLY GRANTED. The  
Amended Decision dated September 30, 2010 of the Court of Very truly yours,
Appeals in CA-G.R. CV No. 75045-MIN is hereby AFFIRMED
with MODIFICATION as follows: (SGD)
WILFREDO V.
1. Petitioner Land Bank of the Philippines is ordered to pay LAPITAN
respondent Phil-Agro Industrial Corporation Division Clerk of
 
P11,640,730.68 representing the just compensation of Court
the subject landholdings; and    
  By:
2. Legal interest shall be pegged at the rate of twelve    
percent (12%) per annum, reckoned from the time of   (SGD)
taking on September 16, 1992. Thereafter, or beginning MISAEL
July 1, 2013, until fully paid, just compensation shall   DOMINGO C.
earn interest at the new legal rate of six percent (6%) per BATTUNG III
annum. Deputy Division
 
Clerk of Court
SO ORDERED.
[1]
 Rollo, pp. 38-62. declarations, and the assessment made by government
assessors shall be considered. The social and economic benefits
 Penned by Associate Justice Rodrigo F. Lim, Jr., with
[2]
contributed by the farmers and the farmworkers and by the
Associate Justices Angelita A. Gacutan and Nina G. Antonio- Government to the property as well as the non-payment of taxes
Valenzuela concurring; id. at 7-10. or loans secured from any government financing institution on
the said land shall be considered as additional factors to
[3]
 Id. at 13. determine its valuation.
[4]
 Id. at 13-14.  Revised Rules and Regulations Governing the Valuation of
[14]

Lands Voluntarily Offered or Compulsorily Acquired Pursuant

[5]
 Id. at 14. to Republic Act No. 6657.
[6]
 Id. [15]
 Rollo, pp. 17-19.

 AN ACT INSTITUTING A COMPREHENSIVE AGRARIAN

[7] [16]
 Id. at 19-20.
REFORM PROGRAM TO PROMOTE SOCIAL JUSTICE AND
INDUSTRIALIZATION, PROVIDING THE MECHANISM FOR ITS [17]
 Id. at 83-98.
IMPLEMENTATION, AND FOR OTHER PURPOSES. Approved on
June 10, 1988. [18]
 Id. at 125-134.
[8]
 Rollo, p. 14. [19]
 Id. at 7-10.
[9]
 Id. at 15. [20]
 Id. at 9-10.
[10]
 Id. [21]
 Id. at 8-9.

 CA Decision dated August 27, 2008 penned by Associate

[11] [22]
 G.R. No. 196140, January 27, 2016.
Justice Michael P. Elbinias, with Associate Justices Rodrigo F.
Lim, Jr. and Ruben C. Ayson concurring; id. at 12-22. [23]
 Id.
[12]
 Id. at 21.  Secretary of the Department of Public Works and Highways v.
[24]

Tecson, G.R. No. 179334, April 21, 2015, 756 SCRA 389, 413.
 Section 17. Determination of Just Compensation.—In
[13]

determining just compensation, the cost of acquisition of the  Id. at 414, citing Apo Fruits Corp., et al. v. Land Bank of the
[25]

land, the current value of the like properties, its nature, actual Phils., 647 Phil. 251, 273 (2010).
use and income, the sworn valuation by the owner, the tax
  Land Bank of the Philippines v. Spouses Antonio and Carmen
[26]

Avanceña, G.R. No. 190520, May 30, 2016.

 Land Bank of the Philippines v. Alfredo Hababag, Sr., G.R.

[27]

No. 172352, June 8, 2016.

 Land Bank of the Philippines v. Spouses Antonio and Carmen

[28]

Avanceña, supra note 26.

[29]
 G.R. No. 172352, June 8, 2016.
[30]
 647 Phil. 251 (2010).

 Land Bank of the Philippines v. Alfredo Hababag, Sr., supra

[31]

note 29.
[32]
 Lebrudo, et al. v. Loyola, 660 Phil. 456, 462 (2011).

 Sy v. Local Government of Quezon City, 710 Phil. 549, 560

[33]

(2013).

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801 Phil. 27
THIRD DIVISION
[ G.R. No. 185082, November 28, 2016 ]
MANDAUE REALTY & RESOURCES CORPORATION AND
MANDAUE CITY REGISTER OF DEEDS, PETITIONERS, VS.
THE COURT OF APPEALS AND BANGKO SENTRAL NG
PILIPINAS, RESPONDENTS.
DECISION
JARDELEZA, J.:  Gotesco's original complaint and the counterclaim of BSP for
This is a Petition for Certiorari and Mandamus[1] assailing the
Resolutions dated July 25, 2008[2] and October 21, 2008[3] of the
Court of Appeals (CA) in CA-G.R. CEB-CV No. 02009. The
assailed Resolutions denied the Motion to Dismiss Appeal[4] filed
by Mandaue Realty and Resources Corporation (MARRECO).
MARRECO claimed that the appeal filed by the Bangko Sentral
ng Pilipinas (BSP) under Rule 41 of the Rules of Court was
erroneous as the issues involved pure questions of law which
are the proper subjects of a petition for review
on certiorariunder Rule 45.
Facts
On October 18, 2006, BSP filed a Complaint for Annulment of
Title/Reconveyance/Reinstatement of Title[5] (Complaint) against
MARRECO docketed as Civil Case No. MAN-5524 before the
Regional Trial Court (RTC) ofMandaue City, Branch 56.[6]
BSP prayed that Transfer Certificate of Title (TCT) No.
54456[7] covering Lot 1-K-6-D-1 with an area of forty thousand
two hundred fifty seven square meters (40,257 sq.m.) in
Barangays Poblacion and Subangdaku, Mandaue, Cebu
registered in the name of MARRECO be cancelled and that TCT
No. 46781[8] covering the same property and registered in the
name of BSP be reinstated.[9] In support of its prayer, BSP
argued that the Order dated January 19, 2004[10] in Civil Case
No. MAN-3902 entitled Gotesco Properties, Inc. v. Bangko
Sentral ng Pilipinas, et al. rendered by RTC Branch 55,
Mandaue City, nullifying BSP's title to the property and
restoring the same to MARRECO, was null and void.[11]
The dispositive portion of the Order dated January 19, 2004 in
Civil Case No. MAN-3902 reads:
WHEREFORE, judgment IS hereby rendered dismissing
being moot and academic; and on the complaint-in-
intervention, and annulling:
1. The Deed of Absolute Sale (Annex "B", Marreco
complaint) executed by Marreco in favor of Gotesco;
2. The Deed of Real Estate Mortage executed by Ever
Electrical and Manufacturing, Inc. and Gotesco
Properties, Inc. in favor of Orient Commercial Banking
Corporation dated January 13, 1998 over TCT No.
41450, Register of Deeds, Mandaue City (Annex "B",
Gotesco Amended Complaint);
3. The Deed of Assignment executed by Orient Commercial
Banking Corporation in favor of Bangko Sentral ng
Pilipinas dated January 9, 1998 in TCT No. 41450
(Annex ''E", Marreco Complaint);
4. The Certificate of Sale executed by Atty. Joseph Boholst
in favor of Bangko Sentral ng Pilipinas dated September
20, 1998 in TCT No. 41450 (Annex "C", Gotesco
Complaint);
 5. The Affidavit of Consolidation executed by Bangko
Sentral ng Pilipinas dated September 26, 2000,
annotated in TCT No. 41450, Annex "F" (Marreco
Complaint).
The Court further orders:
1. The cancellation of TCT No. 41450 issued in the name of
Gotesco Properties, Inc. (Annex "A", Gotesco Complaint);
2. The restoration or reinstatement of TCT No. 40447 in
the name of Mandaue Realty and Resources Corporation
(Annex "A", Marreco Complaint) and cancelling
annotations under Entry Nos. 5184, 5185, 5186, and
5187, all inscribed on August 21, 1997 in the
Memorandum of Encumbrances thereof;
3. Gotesco Properties, Inc. to pay to Mandaue Realty and
Resources Corporation the sum of P1,000,000.00 for
and as attorney['s] fees.
SO ORDERED.[12]
Instead of answering BSP's Complaint, MARRECO filed a
Motion to Dismiss[13] dated January 29, 2007 alleging, among
others, that: (1) RTC Branch 56 has no jurisdiction because the
allegations in the Complaint seek the annulment of a final
judgment rendered by a co-equal court; (2) as the issue of
ownership of the property was already settled in Civil Case No.
MAN-3902 and subsequently in CA-G.R. CV No. 81888
entitled Gotesco Properties, Inc. v. Bangko Sentral and Pilipinas,
et al. through the CA's Resolution dated March 11, 2005,
[14]
 BSP's complaint is already barred by res judicata; and (3)
BSP is guilty of forum shopping.
In its Opposition to the Motion to Dismiss, BSP claimed, among
others, that: (1) the Complaint was one for annulment of title
under Article 476 of the Civil Code which falls within the
exclusive jurisdiction of the RTC; (2) the CA's Resolution in CA-
G.R. CV No. 81888 is not applicable; and (3) that BSP is not
guilty of forum shopping.[15]
In its Reply, MARRECO pointed out BSP's failure to deny the
finality of the January 19, 2004 Order of RTC Branch 55 and
March 11, 2005 Resolution of the CA and that BSP's title was
obtained under a notice of lis pendens. It also reiterated the
grounds relied upon in its Motion to Dismiss.[16]
On March 22, 2007, RTC Branch 56 issued an Order,
[17]
 dismissing BSP's Complaint on the ground of lack of
jurisdiction. It ruled that its assumption of jurisdiction over the
Complaint would result in trespassing upon or intruding into
the exclusive domain and realm of a co-equal court. The
dispositive portion of the Order reads:
WHEREFORE, foregoing premises considered, and without
necessarily going into the merits of this case[,] the Court, in the
interest of justice and judicial stability, has decided to, as it
hereby decides, to GRANT the Defendant's Motion to Dismiss.
Accordingly, this case is hereby ordered DISMISSED. 
SO ORDERED.[18]
BSP timely appealed the aforesaid Order by filing a Notice of
Appeal and its Appellant's Brief.[19]
On November 11, 2008, MARRECO, instead of filing an
Appellee's Brief:filed a Motion to Dismiss Appeal alleging that 1)
the issues raised in the appellant's brief are pure questions of
law; hence, the CA has no jurisdiction to entertain the appeal;
and 2) the appeal is frivolous and dilatory.[20] Despite notice
from the CA, BSP did not file its Comment.[21]
In the first assailed Resolution dated July 25, 2008, the CA
denied the Motion to Dismiss Appeal on the ground that the
issues raised in the appellant's brief involved mixed questions of
fact and law.[22]
MARRECO then filed a Motion for Reconsideration.[23] In its
Opposition to the Motion for Reconsideration, BSP argued that
the Motion for Reconsideration was a mere rehash of the Motion
to Dismiss Appeal, hence, pro-forma.[24] MARRECO then filed its
Reply stating that: a) BSP was unable to defend the CA's
Resolution in failing utterly to point out what factual issues
were raised; b) the issues raised were all legal questions; c) as
no trial was held and no evidence adduced, there was nothing
to look into or evaluate; and d) the quoted paragraph in the RTC
Judgment was at best a legal conclusion or obiter dictum.[25]
In the second assailed Resolution dated October 21, 2008, the
CA denied MARRECO's Motion for Reconsideration.[26]
Hence, this Petition for Certiorari and Mandamus.
MARRECO argues that the issues raised in BSP's Appeal are
pure questions of law which are proper subjects of a Rule 45
petition for review on certiorari filed before the Court and not of
a notice of appeal under Rule 41 filed before the appellate court.
It adds that the CA has no jurisdiction to decide appeals where
only questions of law are involved because such jurisdiction
belongs to the Court.[27] MARRECO prays that a writ of
mandamus be issued directing the CA to dismiss BSP's appeal
and a writ of certiorari be issued annulling the July 25, 2008
and October 21, 2008 Resolutions of the CA.[28]
Issue
Whether the CA acted with grave abuse of discretion amounting
to lack or excess of jurisdiction when it denied MARRECO's
Motion to Dismiss Appeal and assumed jurisdiction over BSP's
appeal.
Ruling
We dismiss the petition.
A petition for certiorari will only lie in case of grave abuse of
discretion.[29] It may be issued only where it is clearly shown
that there is patent and gross abuse of discretion as to amount
to an evasion of positive duty or virtual refusal to perform a
duty enjoined by law, or to act at all in contemplation of law, as
where the power is exercised in an arbitrary or despotic manner
by reason of passion or personal hostility.[30]
Mandamus, on the other hand, is a command issuing from a
court of law of competent jurisdiction, in the name of the state
or the sovereign, directed to some inferior court, tribunal, or
board, or to some corporation or person requiring the
performance of a particular duty therein specified, which duty
results from the official station of the party to whom the writ is
directed or from operation of law.[31]
The CA did not act with grave abuse of discretion amounting to
lack or excess of jurisdiction when it denied MARRECO's Motion
to Dismiss Appeal and assumed jurisdiction over BSP's Appeal.
Section 2, Rule 41 of the Rules of Court[32] governs appeals from
judgments and final orders of the RTC:
(a) If the issues raised involve questions of fact or mixed
questions of fact and law, the proper recourse is
an ordinary appeal to the CA in accordance with Rule
41 in relation to Rule 44 of the Rules of Court; and
(b) If the issues raised involve only questions of law, the
appeal shall be to the Court by petition for review
on certiorari in accordance with Rule 45 of the Rules of
Court.[33] (Emphasis supplied.)
In Sevilleno v. Carilo,[34] citing Macawiwili Gold Mining and
Development Co., Inc. v. Court of Appeals,[35] we summarized:
(1) In all cases decided by the RTC in the exercise of its original
jurisdiction, appeal may be made to the Court of Appeals by
mere notice of appeal where the appellant raises questions
of fact or mixed questions of fact and law;
(2) In all cases decided by the RTC in the exercise of its original
jurisdiction where the appellant raises only questions of
law, the appeal must be taken to the Supreme Court on a
petition for review on certiorari under Rule 45[;]
(3) All appeals from judgments rendered by the RTC in the
exercise of its appellate jurisdiction, regardless of whether
the appellant raises questions of fact, questions of law, or
mixed questions of fact and law, shall be brought to the
Court of Appeals by filing a petition for review under Rule
42.[36] (Emphasis supplied)
A question of law exists when there is doubt or controversy as
to what the law is on a certain state of facts, and there is a
question of fact when the doubt or difference arises as to the
truth or falsehood of facts, or when the query necessarily invites
calibration of the whole evidence considering mainly the
credibility of witnesses, existence and relevancy of specific
surrounding circumstances, their relation to each other and to
the whole and probabilities of the situation.[37] No examination
of the probative value of the evidence would be necessary to
resolve a question of law. The opposite is true with respect to
questions of fact.[38]
The test of whether a question is one of law or fact is not the
appellation given to such question by the party raising the
same. It is whether the appellate court can determine the issue
raised without reviewing or evaluating the evidence and would
only limit itself to the inquiry of whether the law was properly
applied given the facts and supporting evidence.[39] Such is a
question of law. Otherwise, it is a question of fact.
The nature of the issues to be raised on appeal can be gleaned
from the appellant's notice of appeal filed in the trial court and
in his or her brief as appellant in the appellate court.[40] Here,
BSP raised the following issues in its Appellant's Brief:
1) In rendering the assailed order, the trial court erred in
concluding that to assume jurisdiction over the instant case
will operate to trespass upon or intrude into the exclusive
domain and realm of a co-equal court.
2) Similarly, the trial court committed an erroneous
appreciation of the true import of the Order dated [January
19,] 2004 issued by Judge Ulric R. Cañete.
3) The order dismissing the case of quieting of title has
practically disregarded and rendered meaningless the
provisions of the Philippine Civil Code, Chapter 3 entitled
Quieting of Title.
4) Under the peculiar facts and law of the case below, the
Honorable Court should remand the case to the trial court
for further proceedings as mandated by the Rules of Court
involving claims by the citizens of the country instead of
dismissing the case on technicality when the same does not
apply at all considering the abrogation or denial of the right
of BSP to seek redress of its claims[.][41]
Meanwhile, in its Appellant's Brief, BSP explained that while the
January 19, 2004 Order of the trial court in Civil Case No.
MAN-3902 did not direct the cancellation of TCT No. 46781, the
Register of Deeds of Mandaue City, without notice to BSP,
proceeded to cancel TCT No. 46781. As a result, BSP was
compelled to file an action for annulment of title and
reconveyance or annulment of title, the action subject of the
present petition.[42] BSP argued that the trial court, in granting
MARRECO's Motion to Dismiss, erred in concluding that to rule
otherwise would amount to an intrusion into an order of a co-
equal court. According to BSP, contrary to the pronouncement
of the trial court in its March 22, 2007 Order, there can be no
intrusion into an order of a co-equal court since Civil Case No.
MAN-3902 did not order the cancellation of TCT No. 46781
while BSP's complaint for annulment of title and reconveyance
or annulment of title assails the Register of Deeds' cancellation
of TCT No. 46781.[43]
We find that BSP's appeal does not only involve questions of
law. It also involves questions of fact. The allegations in BSP's
complaint and appellant's brief as to the antecedent facts that
led to the cancellation of TCT No. 46781 create an uncertainty
on the propriety of the trial court's pronouncement that to
entertain BSP's complaint would amount to an intrusion into an
order of a co-equal court and call for a calibration of the
evidence on record. Also telling is BSP's allegation that it is a
mortgagee-in good faith who obtained its title to the property by
being the highest bidder during the auction sale in the
foreclosure proceedings. As an innocent third party, it is not
bound by whatever transpired between Gotesco and MARRECO.
These matters constitute a question of fact and not a question
of law as MARRECO would like to present it. As the CA correctly
held:
It is indubitable that what impelled BSP to file the instant
complaint for annulment of title and reconveyance or quieting of
title before RTC Branch 56, docketed as Civil Case No. Man-
5524 is not the Decision of January 19, 2004 rendered by RTC,
Branch 55 in Civil Case No. Man-3902 but the subsequent
cancellation of BSP's title without any court order to that effect.
From this premise, the issue on whether or not the assumption
of jurisdiction over the instant case is equivalent to annulment
of judgment of a coequal tribunal is considered a question of
fact. The surrounding facts which brought about the
cancellation of BSP's title need to be examined to determine
whether the complaint subject of the present appeal is indeed
one that amounts to the annulment of judgment of a co-equal
court.
At first glance, this issue appears to involve a question of law
since it does not concern itself with the truth or falsity of
certain facts. Still, in order that this Court can make a ruling on
the nature of the action instituted before RTC, Branch 56, it has
to evaluate the existence and the relevance of the circumstances
that led to the cancellation of BSP's title. The determination of
these facts is crucial as it will resolve whether the assumption
of jurisdiction over the instant case would indeed tantamount to
violation of the doctrine on non-interference, whether the
cancellation of BSP's title by virtue of the Order of January 19,
2004 rendered by RTC, Branch 55 is proper though the order is
silent on the matter, whether such cancellation is tantamount
to a collateral attack on BSP's title. In short, in order to address
fully the issues raised by BSP in its Brief, this Court necessarily
has to make factual findings.
Notably, plaintiff-appellant brought the present appeal raising
mixed questions of fact and law. BSP impugns the decision of
the RTC dismissing its complaint on the ground that it violates
the principle on non-interference to a co equal court The
resolution of the propriety of dismissal entails a review of the
factual circumstances that led the trial court to decide in such
manner. Further, BSP also questions the lower court's
appreciation of the true import of the Order dated January 19,
2004 and its disregard of the provisions under the Civil Code on
quieting of title. Hence, the filing of the present appeal before
US is proper.[44]
Given the mixed questions of law and fact raised, BSP properly
elevated the RTC's March 22, 2007 Order to the CA on ordinary
appeal under Rule 41, Section 2 of the Rules of Court.
WHEREFORE, the Petition for Certiorari and Mandamus is
hereby DISMISSED. The Resolutions of the Court of Appeals
dated July 25, 2008 and October 21, 2008 are AFFIRMED. Let
records of the case be REMANDED to the Court of Appeals
which is DIRECTED to proceed with the appeal with dispatch.
SO ORDERED. and Amy C. Lazaro-Javier as members.

Leonardo-De Castro,* Peralta (Acting Chairperson), Perez, [3]

 Id. at 318-321.
and Reyes, JJ., concur.
[4]
 Id. at 273-299.
[5]
 Id. at 49-61.
December 13, 2016
[6]
 Id. at 8.
NOTICE OF JUDGMENT
[7]
 Id. at 96.
Sirs / Mesdames:
[8]
 Id. at 94-95.
Please take notice that on November 28, 2016 a Decision, copy [9]
 Id. at 58.
attached hereto, was rendered by the Supreme Court in the
above-entitled case, the original of which was received by this [10]
 Id. at 117-138.
Office on December 13, 2016 at 1:52 p.m.
[11]
 Id. at 51-54.
Very truly
yours, [12]
 Id. at 137-138.

(SGD) [13]
 Id. at 97-116.
WILFREDO V.
LAPITAN [14]
 Id. at 139-150.
Division Clerk
 
of Court [15]
 Id. at 10.
[16]
 Id.
 Designated as additional Member in lieu of Hon. Presbitero J.
*

Velasco, Jr. per Raffle dated August 23, 2013. [17]

 Id. at 232-239.
[1]
 Rollo, pp. 3-48. [18]
 Id. at 239.

 Id. at 301-304. Penned by Associate Justice Priscilla

[2] [19]
 Id. at 11; 171-209.
Baltazar-Padilla with Associate Justices Franchito N. Diamante
[20]
 Id. at 273; 299. appeals where the law or these Rules so require. In such
cases, the record on appeal shall be filed and served in like
[21]
 Id. at 301. manner.
[22]
 Id. at 304. (b) Petition for review. - The appeal to the Court of Appeals in
cases decided by the Regional Trial Court in the exercise of
[23]
 Id. at 305-316. its appellate jurisdiction shall be by petition for review in
accordance with Rule 42.
[24]
 Id. at 12.
(c) Appeal by certiorari. - In all cases where only questions of
[25]
 Id. at 12-13. law are raised or involved, the appeal shall be to the
Supreme Court by petition for review on certiorari in
[26]
 Id. at 321. accordance with Rule 45.
[27]
 Id. at 4-5.  Bases Conversion Development Authority v. Reyes, G.R. No.
[33]

194247, June 19, 2013, 699 SCRA 217, 224-225.

[28]
 Id. at 44.
[34]
 G.R. No. 146454, September 14, 2007, 533 SCRA 385.
 Asian Trading Corporation v. CA, G.R. No. 76276, February
[29]

15, 1999, 303 SCRA 152, 161. [35]

 G.R. No. 115104, October 12, 1998, 297 SCRA 602.

 Lalican v. Vergara, G.R. 108619, July 31, 1997, 276 SCRA

[30] [36]
 Supra note 34 at 388.
518, 528.
 China Road and Bridge Corporation v. Court of Appeals, G.R.
[37]

 Abaga v. Panes, G.R. No. 147044, August 24, 2007, 531

[31]
No. 137898, December 15, 2000, 348 SCRA 401, 408.
SCRA 56, 61-62.
 Macababbad, Jr. v. Masirag, G.R. No. 161237, January 14,
[38]

[32]
 Sec. 2. Modes of appeal. - 2009, 576 SCRA 70, 81.

(a) Ordinary appeal. - The appeal to the Court of Appeals in  China Road and Bridge Corporation v. Court of Appeals,
[39]

cases decided by the Regional Trial Court in the exercise of supra at 411-412.
its original jurisdiction shall be taken by filing a notice of
appeal with the court which rendered the judgment or final
[40]
 Macababbad, Jr. v. Masirag, supra at 82.
order appealed from and serving a copy thereof upon the
adverse party. No record on appeal shall be required except
[41]
 Rollo, pp.  188-189.
in special proceedings other cases of multiple or separate
[42]
 Id. at 181-184.
[43]
 Id. at 190-205.
[44]
 Id. at 319-320.

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SECOND DIVISION
[ G.R. No. 219852, April 03, 2019 ]
PEOPLE OF THE PHILIPPINES, PLAINTIFF-APPELLEE, VS.
DAVE CLAUDEL Y LUCAS, ACCUSED-APPELLANT.
DECISION
CAGUIOA, J:  The version of the prosecution, as summarized by the CA, is as
This is an Appeal[1] under Section 13(c), Rule 124 of the Rules of
Court from the Decision[2] dated October 22, 2014 of the Court
of Appeals, Twelfth (12th) Division (CA) in CA-G.R. CR-HC. No.
05973, which affirmed the Decision[3] dated October 31, 2012
rendered by the Regional Trial Court, Branch 204, Muntinlupa
City (RTC) in Criminal Case No. 09-149, which found herein
accused-appellant Dave Claudel y Lucas (Dave) guilty beyond
reasonable doubt of violating Section 5, Article II of Republic Act
No. (RA) 9165, otherwise known as the Comprehensive
Dangerous Drugs Act of 2002, as amended.
The Facts
The Information filed against Dave for violation of Section 5,
Article II of RA 9165 pertinently reads:
That on or about the 26th day of February, 2009, in the City of
Muntinlupa, Philippines, and within the jurisdiction of this
Honorable Court, the above-named accused, not being
authorized by law, did then and there willfully, unlawfully and
feloniously sell, deliver and give away to another a (sic)
Methamphetamine hydrochloride, a dangerous drug, contained
in one (1) heat-sealed transparent plastic sachet weighing 0.04
gram, in violation of the above-cite [sic] law.
Contrary to law.[4]
When arraigned, Dave pleaded not guilty to the offense charged.
[5]
Version of the Prosecution
follows:
The prosecution presented its witnesses, [PO2] Rondivar
Hernaez ([PO2 Hernaez]) and [PO1] Bob Yangson [(PO1
Yangson]), a member of the buy-bust team. Their combined
testimonies established the following facts:
On 26 February 2009, a buy-bust operation was conducted by
the operatives of Station Anti-Illegal Drugs-Special Operation
Task Group (SAID-SOTG) Muntinlupa Police following a report
that a certain Dave Claudel ("Dave") is engaged in illegal drug
activities. Prior to the buy-bust operation, Dave was also
previously arrested for [v]iolation of RA 9165 involving illegal
drugs.
In preparation for the buy-bust-operation [sic], the buy-bust
team prepared the Pre-Operational Sheet and Coordination
Sheet which they faxed to the Philippine Drug Enforcement
Agency (PDEA). In turn, the buy-bust team received a
Certificate of Coordination from PDEA.
Team Leader, Chief Inspector Paningbatan assigned [PO2]
Hernaez as the poseur[-]buyer while PO1 Yangson was
designated as the immediate back up. C/Insp. Paningbatan
handed [PO2] Hernaez a Five Hundred Peso Bill buy-bust
money on which the latter wrote his initials "RH" on the lower
right portion of the bill. It was agreed upon that [PO2] Hernaez
will light a cigarette as a pre-arranged signal that the sale of
illegal drugs was consummated.
[PO2] Hernaez admitted that he was already familiar with Dave
as he used to see him in court hearings. However, he was not
aware whether Dave could also remember him. At any rate, to
prevent being recognized, [PO2] Hernaez wore a disguise by
changing his clothes. He wore a gray polo shirt, maong pants,
leather shoes and a cap to cover his face. He also needed an
asset to accompany him as Dave would not sell drugs to anyone
except those known to him.
At around 9:30 o'clock [sic] in the evening, the team proceeded
to the target place in Tuazon Street, Barangay Poblacion. As
planned, [PO2] Hernaez together with the asset walked towards
Tuazon Street corner Rizal Street where it was dark and there
was no light. The asset pointed [to] alias Dave as the person
selling illegal drugs. Upon seeing each other, the asset nodded
to Dave. The asset then introduced [PO2] Hernaez to Dave as
his kumpare from Parañaque who is interested in buying shabu
as there was scarcity of shabu in Parañaque. Dave asked them
how much would they buy from him to which [PO2] Hernaez
replied, "Php500.00, pare." Dave reached into the secret pocket
of his maong pants and told [PO2] Hernaez, "Tamang-tama pare
huling kasa ko na lang 'to pauwi na rin ako ". [PO2] Hernaez
handed Dave the buy-bust money while Dave handed him a
transparent plastic sachet containing white crystalline
substance. After examining the plastic sachet, [PO2] Hernaez lit
his cigarette. [PO1] Yangson, the assigned back-up of [PO2]
Hernaez immediately rushed to the scene and assisted in
arresting Dave.
After informing Dave of his rights, [PO2] Hernaez and the rest of
the buy-bust team brought Dave to their office where they
recovered from him the buy-bust money. The plastic sachet
remained in [PO2] Hernaez's custody until they reached their
office. Upon arriving thereat, [PO2] Hernaez placed the marking
"DC" on the seized plastic sachet. They conducted an Inventory
of the seized item in the presence of Dave and Rodolfo
Baldobino, DAPCO representative.
[PO2] Hernaez explained that they contacted a representative
from the media and the barangay but they received a negative
reply as it was already around 10:00 or 11:00 o'clock in the
evening. Photographs of Dave, the buy-bust team, and the
confiscated items were also taken. They also prepared a Request
for Laboratory Examination which [PO2] Hernaez and [PO1]
Yangson submitted to the Crime Laboratory. [PO2] Hernaez also
took custody of the seized item and submitted the same to the
Custodian in the Crime Laboratory.
Afterwards, [PO2] Hernaez came to know that the result of the
Laboratory Examination yielded positive for methamphetamine
hydrochloride. Thereafter, they executed a Joint Affidavit, a
Booking Sheet and Spot Report of the incident.[6]
Version of the Defense
On the other hand, the defense's version, as summarized by the
CA, is as follows:
The defense presented as its witnesses, the accused himself,
Dave Claudel, Ligaya Santos and Emmerlyn Arellano
[(Emmerlyn)]. Their combined testimonies narrate the following
facts:
On 26 February 2009 at about 6:00 o'clock in the evening in P.
Tuazon Street, Poblacion, Muntinlupa City, Dave Claudel was
fetching water near the store of his sister, Ligaya Santos
("Ligaya"). Ligaya was manning her store with her employee,
Emmerlyn Arellano, when more or less six (6) armed men with
guns and handcuffs arrived. Dave eventually came to know that
the [sic] two (2) of these men were police officers [PO1] Yangson
and [PO2] Hernaez. Dave was surprise[d] when [he was]
instructed by the police officers to follow them. He was ordered
to raise his hands and then he was handcuffed. The police
officers were looking for a can as they bodily searched him.
Unaware as to what they were talking about, Dave failed to give
an answer. Consequently, one of the men hit him on his face.
Dave insisted that nothing was recovered from him. H[is] sister,
on the other hand, was crying and trembling with fear as the
police officers threatened them saying, "nagbebenta kayo ng
drugs kaya ikukulong namin kayo." Dave and Ligaya were
taken aboard the police vehicle and were brought to [the]
Muntinlupa police station.
Upon arrival at the police station, one of the arresting officers
spoke to Ligaya. The police officer informed her that she is
suspected of being involved in her brother's illegal drug
activities. Ligaya denied the said allegation and insisted that her
brother is not selling drugs. Thereafter, the police officers
turned their attention to Dave sitting next to her. The police
officers questioned Dave about his illegal drug activities and
forced him to admit as to the location of some cash. Dave
denied having knowledge of what they were talking about.
Afterwards, another police officer talked to Ligaya and told her
that she could go home but before she could leave the
precinct[,] she must give One Hundred Thousand Pesos
(Php100,000.00) for Dave's release. Ligaya responded that they
did not have that amount of money to which the police officers
answered, "tutuluyan nila si Dave". The police officer[s] then
showed her a sachet which they will use as evidence against
Dave. Thereafter, she was release[d] from the precinct while
Dave remained incarcerated.
After Ligaya left, [PO2] Hernaez spoke to Dave and showed him
one (1) plastic sachet and one (1) Five Hundred Peso bill that
will be used as evidence against him. Dave questioned the
evidence as the same was not his and was not recovered from
him. However, [PO2] Hernaez remained silent. Instead, he was
put in jail. Dave only became aware of the charge against him
when he was taken and presented before the Fiscal.[7]
Ruling of the RTC
In its Decision[8] dated October 31, 2012, the RTC held that the
prosecution sufficiently established that Dave was caught
in flagrante delicto of selling drugs to a poseur-buyer during a
buy-bust operation.[9] It stressed that the police officers are
entitled to the presumption of regularity in the performance of
their official functions in the absence of any ill motive or bad
faith on their part.[10] Lastly, it ruled that the testimony of
defense witness Emmerlyn deserves scant consideration for
being inconsistent and conflicting.[11]
The dispositive portion of the Decision reads:
WHEREFORE, premises considered and finding the accused
GUILTY beyond reasonable doubt of the crime herein charged,
DAVE CLAUDEL y LUCAS is sentenced to LIFE IMPRISONMENT
and to pay a FINE of P500,000.00
The preventive imprisonment undergone by the accused shall
be credited in his favor.
The drug evidence is ordered transmitted to the Philippine Drug
Enforcement Agency (PDEA) for proper disposition.
Issue a MITTIMUS committing accused DAVE CLAUDEL y
LUCAS to the New Bilibid Prison (NBP) for the service of his
sentence pending any appeal that he may file in this case.
SO ORDERED.[12]
Aggrieved, Dave appealed to the CA.
Ruling of the CA
In its Decision[13] dated October 22, 2014, the CA affirmed
Dave's conviction. The dispositive portion of the Decision reads:
WHEREFORE, premises considered, the instant appeal
is DENIED. The Judgment dated 31 October 2012 of the
Regional Trial Court of Muntinlupa City Branch 204 in Criminal
Case No. 09-149 is hereby AFFIRMED.
SO ORDERED.[14]
The CA ruled that the elements of illegal sale of dangerous
drugs have been amply proven by the prosecution to affirm the
conviction of Dave.[15] It held that non-compliance with the strict
requirements of Section 21 of RA 9165 is not necessarily fatal to
the prosecution's case.[16] What is of utmost importance is the
preservation of the integrity and evidentiary value of the seized
items.[17] Finally, it found that the police officers exerted earnest
efforts to obtain the presence and signatures of the required
witnesses, but the same proved futile as they received a
negative reply since it was already late at the time of the buy-
bust operation.[18]
Hence, the instant appeal.
Issue
Whether Dave's guilt for violation of Section 5 of RA 9165 was
proven beyond reasonable doubt.
The Court's Ruling
The appeal is meritorious. Dave is accordingly acquitted.
In cases involving dangerous drugs, the confiscated drug
constitutes the very corpus delicti of the offense[19] and the fact
of its existence is vital to sustain a judgment of conviction.[20] It
is essential, therefore, that the identity and integrity of the
seized drug be established with moral certainty.[21] Thus, in
order to obviate any unnecessary doubt on its identity, the
prosecution has to show an unbroken chain of custody over the
same and account for each link in the chain of custody from the
moment the drug is seized up to its presentation in court as
evidence of the crime.[22]
In this regard, Section 21, Article II of RA 9165,[23] the
applicable law at the time of the commission of the alleged
crime, outlines the procedure which the police officers must
strictly follow to preserve the integrity of the confiscated drugs
and/or paraphernalia used as evidence. The provision requires
that: (1) the seized items be inventoried and
photographed immediately after seizure or confiscation; (2)
that the physical inventory and photographing must be done in
the presence of: (a) the accused or his/her representative or
counsel, (b) an elected public official, (c) a representative
from the media, and (d) a representative from the
Department of Justice (DOJ), all of whom shall be required to
sign the copies of the inventory and be given a copy of the same
and the seized drugs must be turned over to the PNP Crime
Laboratory within 24 hours from confiscation for examination.
[24]
The phrase "immediately after seizure and confiscation" means
that the physical inventory and photographing of the drugs
were intended by the law to be made immediately after, or at
the place of apprehension. It is only when the same is not
practicable that the Implementing Rules and Regulations (IRR)
of RA 9165 allow the inventory and photographing to be done as
soon as the buy-bust team reaches the nearest police station or
the nearest office of the apprehending officer/team.[25] In this
connection, this also means that the three required
witnesses should already be physically present at the time
of the conduct of the inventory of the seized items which,
again, must be immediately done at the place of seizure and
confiscation — a requirement that can easily be complied
with by the buy-bust team considering that the buy-bust
operation is, by its nature, a planned activity. Verily, a buy-
bust team normally has sufficient time to gather and bring with
it the said witnesses.
The Court, however, has clarified that under varied field
conditions, strict compliance with the requirements of Section
21 of RA 9165 may not always be possible;[26] and the failure of
the apprehending team to strictly comply with the procedure
laid out in Section 21 of RA 9165 does not ipso facto render the
seizure and custody over the items void and invalid. However,
this is with the caveat that the prosecution still needs to
satisfactorily prove that: (a) there is justifiable ground for non-
compliance; and (b) the integrity and evidentiary value of the
seized items are properly preserved.[27] It has been repeatedly
emphasized by the Court that the prosecution has the positive
duty to explain the reasons behind the procedural lapses.
[28]
 Without any justifiable explanation, which must be proven
as a fact,[29] the evidence of the corpus delicti is unreliable, and
the acquittal of the accused should follow on the ground that
his guilt has not been shown beyond reasonable doubt.[30]
The buy-bust team failed to comply
with the mandatory requirements
under Section 21.
In the present case, the buy-bust team failed to strictly comply
with the mandatory requirements under Section 21, paragraph
1 of RA 9165.
First, the arresting officers failed to mark and photograph the
seized item at the place of arrest and seizure. Neither did they
offer any explanation as to why they did not conduct the
marking and photographing of the item at the place of arrest.
Moreover, none of the three required witnesses was present at
the time of arrest and during the marking, photographing and
conduct of the inventory of the seized items. As testified by PO2
Hernaez:
Q: When you reached your office what did you do with the
item?
A: I placed markings, sir.
xxxx
Q: Aside from the marking what else did you do in your office?
A: We made a Certificate of inventory, sir.
Q: Where was the accused when the Inventory was made?
A: He was present and beside me, sir.
Q: Who were the witnesses to the inventory, if you can recall?
A: Rodolfo Baldobino, a DAPCO representative, sir.
Q: Why only DAPCO representative not the Barangay
official/elected official, DOJ or media? [sic]
A: We contacted the media and Barangay officials but they
had negative reply to us, sir.
Q: What time was it when the Inventory was made?
A: It was late in the evening, around 10:00 or 11:00 in the
evening, sir.
Q: What efforts did you take in order to obtain the presence or
signature of the witnesses just mentioned?
A: We tried to contact the barangay and the media
representative but they never came, sir.
Q: What about the Barangay, what did the Barangay tell you
when you asked for their presence?
A: That there were no Barangay officials around at that time,
sir.[31]
It bears emphasis that the presence of the required witnesses at
the time of the apprehension and inventory is mandatory, and
that the law imposes the said requirement because their
presence serves an essential purpose. In People v. Tomawis,
[32]
 the Court elucidated on the purpose of the law in mandating
the presence of the required witnesses as follows:
The presence of the witnesses from the DOJ, media, and from
public elective office is necessary to protect against the
possibility of planting, contamination, or loss of the seized drug.
Using the language of the Court in People v. Mendoza,
[33]
 without the insulating presence of the representative from
the media or the DOJ and any elected public official during the
seizure and marking of the drugs, the evils of switching,
"planting" or contamination of the evidence that had tainted the
buy-busts conducted under the regime of RA 6425 (Dangerous
Drugs Act of 1972) again reared their ugly heads as to negate
the integrity and credibility of the seizure and confiscation of
the subject sachet that was evidence of the corpus delicti, and
thus adversely affected the trustworthiness of the incrimination
of the accused.
The presence of the three witnesses must be secured not only
during the inventory but more importantly at the time of the
warrantless arrest. It is at this point in which the presence of
the three witnesses is most needed, as it is their presence at the
time of seizure and confiscation that would belie any doubt as
to the source, identity, and integrity of the seized drug. If the
buy-bust operation is legitimately conducted, the presence of
the insulating witnesses would also controvert the usual
defense of frame-up as the witnesses would be able to testify
that the buy-bust operation and inventory of the seized drugs
were done in their presence in accordance with Section 21 of RA
9165.
The practice of police operatives of not bringing to the intended
place of arrest the three witnesses, when they could easily do so
— and "calling them in" to the place of inventory to witness the
inventory and photographing of the drugs only after the buy-
bust operation has already been finished — does not achieve
the purpose of the law in having these witnesses prevent or
insulate against the planting of drugs.
To restate, the presence of the three witnesses at the time of
seizure and confiscation of the drugs must be secured and
complied with at the time of the warrantless arrest; such that
they are required to be at or near the intended place of the
arrest so that they can be ready to witness the inventory and
photographing of the seized and confiscated drugs "immediately
after seizure and confiscation."[34]
Second, the buy-bust team failed to offer any explanation for its
failure to strictly comply with the requirements of Section 21.
When PO2 Hernaez was asked why they were not able to secure
the presence of the three required witnesses, he merely said
that they tried to contact them, but they never came.[35] He also
said that it was already too late in the evening as they arrived in
the police station after the buy-bust operation at around 10:00
or 11:00 in the evening.[36] However, this explanation is not
sufficient to justify their non-compliance with Section 21. They
had more than sufficient time prior to the buy-bust operation to
secure the presence of the required witnesses at the time of
arrest. As admitted by PO2 Hernaez, they were able to
coordinate with the PDEA and prepare the required documents
prior to the buy-bust operation at about 7:00 or 8:00 in the
evening.[37] Moreover, PO2 Hernaez admitted that it was the
second time that they arrested Dave.[38]They thus already knew
what to expect during the buy-bust operation. Hence, they
should have had the foresight to do all the necessary
preparations for it.
It bears stressing that the prosecution has the burden of: (1)
proving its compliance with Section 21, RA 9165, and (2)
providing a sufficient explanation in case of non-compliance. As
the Court en banc unanimously held in the recent case
of People v. Lim:[39]
It must be alleged and proved that the presence of the three
witnesses to the physical inventory and photograph of the illegal
drug seized was not obtained due to reason/s such as:
(1) their attendance was impossible because the place of arrest
was a remote area; (2) their safety during the inventory and
photograph of the seized drugs was threatened by an immediate
retaliatory action of the accused or any person/s acting for and
in his/her behalf; (3) the elected official themselves were
involved in the punishable acts sought to be apprehended; (4)
earnest efforts to secure the presence of a DOJ or media
representative and an elected public official within the period
required under Article 125 of the Revised Penal Code prove
futile through no fault of the arresting officers, who face the
threat of being charged with arbitrary detention; or (5) time
constraints and urgency of the anti drug operations, which
often rely on tips of confidential assets, prevented the law
enforcers from obtaining the presence of the required witnesses
even before the offenders could escape.[40] (Underscoring added,
emphasis omitted)
The saving clause does not apply to
this case.
As earlier stated, following the IRR of RA 9165, the courts may
allow a deviation from the mandatory requirements of Section
21 in exceptional cases, where the following requisites are
present: (1) the existence of justifiable grounds to allow
departure from the rule on strict compliance; and (2) the
integrity and the evidentiary value of the seized items are
properly preserved by the apprehending team.[41] If these
elements are present, the seizure and custody of the confiscated
drug shall not be rendered void and invalid regardless of the
noncompliance with the mandatory requirements of Section 21.
In this regard, it has also been emphasized that the State bears
the burden of proving the justifiable cause.[42] Thus, for the said
saving clause to apply, the prosecution must first recognize the
lapse or lapses on the part of the buy-bust team and justify or
explain the same.[43]

Breaches of the procedure outlined in Section 21 committed by
the police officers, left unacknowledged and unexplained by the
State, militate against a finding of guilt beyond reasonable
doubt against the accused as the integrity and evidentiary value
of the corpus delicti have been compromised.[44] As the Court
explained in People v. Reyes:[45]
Under the last paragraph of Section 21(a), Article II of the IRR of
R.A. No. 9165, a saving mechanism has been provided to
ensure that not every case of non-compliance with the
procedures for the preservation of the chain of custody will
irretrievably prejudice the Prosecution's case against the
accused. To warrant the application of this saving
mechanism, however, the Prosecution must recognize the
lapse or lapses, and justify or explain them. Such
justification or explanation would be the basis for applying
the saving mechanism. Yet, the Prosecution did not concede
such lapses, and did not even tender any token justification or
explanation for them. The failure to justify or explain
underscored the doubt and suspicion about the integrity of
the evidence of the corpus delicti. With the chain of custody
having been compromised, the accused deserves acquittal.
[46]
 (Emphasis supplied)
In the present case, the prosecution neither recognized, much
less tried to justify or explain, the police's deviation from the
procedure contained in Section 21. As testified by PO2 Hernaez,
the buy-bust team did not secure any of the required witnesses;
yet, he did not offer a justifiable reason for the absence of the
required witnesses especially where, as here, the buy-bust team
had more than sufficient time to secure the presence of the
required witnesses prior to the planned arrest.
The integrity and evidentiary value of the corpus delicti have
thus been compromised, thus necessitating the acquittal of
Dave.
The presumption of innocence ofthe 
accused vis-a-vis the presumption of
regularity in performance of official 
duties.
The right of the accused to be presumed innocent until proven
guilty is a constitutionally protected right.[47] The burden lies
with the prosecution to prove his guilt beyond reasonable doubt
by establishing each and every element of the crime charged in
the information as to warrant a finding of guilt for that crime or
for any other crime necessarily included therein.[48]
Here, reliance on the presumption of regularity in the
performance of official duty despite the lapses in the procedures
undertaken by the buy-bust team is fundamentally unsound
because the lapses themselves are affirmative proofs of
irregularity.[49] The presumption of regularity in the performance
of duty cannot overcome the stronger presumption of innocence
in favor of the accused.[50] Otherwise, a mere rule of evidence
will defeat the constitutionally enshrined right to be presumed
innocent.[51]
In this case, the presumption of regularity cannot stand
because of the buy-bust team's blatant disregard of the
established procedures under Section 21 of RA 9165. The Court
has ruled in People v. Zheng Bai Hui[52] that it will not presume
to set an a priori basis of what detailed acts police authorities
might credibly undertake and carry out in their entrapment
operations. However, given the police operational procedures
and the fact that buy-bust is a planned operation, it strains
credulity why the buy-bust team could not have ensured the
presence of the required witnesses pursuant to Section 21 or at
the very least marked, photographed and inventoried the seized
item according to the procedures in their own operations
manual.
All told, the prosecution failed to prove the corpus delicti of the
offense of sale of illegal drugs due to the multiple unexplained
breaches of procedure committed by the buy-bust team in the
seizure, custody, and handling of the seized drug. In other
words, the prosecution was not able to overcome the
presumption of innocence of Dave.
The buy-bust operation was merely
fabricated.
A buy-bust operation is a form of entrapment in which the
violator is caught in flagrante delicto and the police officers
conducting the operation are not only authorized but duty-
bound to apprehend the violator and to search him for anything
that may have been part of or used in the commission of the
crime.[53] However, where there really was no buy-bust operation
conducted, the elements of illegal sale of prohibited drugs
cannot be proved and the indictment against the accused will
have no leg to stand on.[54]
This is the situation in this case.
What puts in doubt the very conduct of the buy-bust operation
is the police officers' deliberate disregard of the requirements of
the law, which leads the Court to believe that the buy-bust
operation against Dave was a mere pretense, a sham. To recall,
the three required witnesses were not present during the buy-
bust operation when the alleged drug was seized from Dave;
hence, there were no unbiased witnesses to prove the veracity of
the events that transpired on the day of the incident or whether
the said buy-bust operation actually took place. Also, the police
officers unjustifiably failed to mark the seized drug at the place
of arrest[55] and to inventory and photograph the same in the
presence of the other statutory witnesses[56] which, again, are
required under the law to prevent planting, switching and
contamination of evidence. These circumstances lend credence
to Ligaya's testimony, which is corroborated by Emmerlyn, that
the former's brother was merely fetching water when he was
suddenly instructed by PO1 Yangson and PO2 Hernaez to follow
them to the police station where he was questioned about his
illegal drug activities and was forced to divulge the location of
some cash.[57] Dave denied having knowledge of what they were
talking about.[58] Meanwhile, another police officer talked to
Ligaya and told her that she could go home but only if she gave
One Hundred Thousand Pesos (P100,000.00) for Dave's release.
[59]
 Ligaya responded that they did not have that amount of
money to which the police officers answered, "tutuluyan nila si
Dave."[60] Thereafter, the police officers showed her a sachet of
drugs, which they said they would use as evidence against
Dave.[61] She was released but her brother was put in jail.
[62]
 Verily, the testimony of the two eyewitnesses deserve more
credit than the testimonies of the police officers who, it must be
stressed anew, did not follow any of the standard procedures
provided by law to prove the veracity of their alleged buy-bust
operation.
Indeed, the Court is not unaware that, in some instances, law
enforcers resort to the practice of planting evidence to extract
information or even to harass civilians.[63] This is despicable.
Thus, the Court reminds the trial courts to exercise extra
vigilance in trying drug cases; and directs the Philippine
National Police to conduct an investigation on this incident and
other similar cases, lest an innocent person is made to suffer
the unusually severe penalties for drug offenses.
Finally, the Court exhorts the prosecutors to diligently
discharge their onus to prove compliance with the provisions of
Section 21 of RA 9165, as amended, and its IRR, which is
fundamental in preserving the integrity and evidentiary value of
the corpus delicti. To the mind of the Court, the procedure SO ORDERED.
outlined in Section 21 is straightforward and easy to
comply with. In the presentation of evidence to prove Carpio, (Chairperson), Perlas-Bernabe, and Lazaro-Javier,
compliance therewith, the prosecutors are enjoined to recognize JJ., concur.
any deviation from the prescribed procedure and provide the J. Reyes, Jr., on wellness leave.
explanation therefor as dictated by available evidence.
Compliance with Section 21 being integral to every conviction,
the appellate court, this Court included, is at liberty to review
the records of the case to satisfy itself that the required proof [1]
 See Notice of Appeal dated November 6, 2014; rollo, p. 17.
has been adduced by the prosecution whether the accused has
raised, before the trial or appellate court, any issue of non-  Id. at 2-16. Penned by Associate Justice Carmelita
[2]

compliance. If deviations are observed and no justifiable
reasons are provided, the conviction must be overturned, and
the innocence of the accused affirmed.[64]
Salandanan-Manahan, with Associate Justices Japar B.
Dimaampao and Elihu A. Ybañez concurring.
 CA rollo, pp. 69-79. Penned by Presiding Judge Juanita T.
[3]

WHEREFORE, in view of the foregoing, the appeal is Guerrero.

hereby GRANTED. The Decision dated October 22,2014 of the
Court of Appeals, Twelfth Division in CA-G.R. CR-HC. No. [4]
 Rollo, p. 3.
05973 is hereby REVERSED and SET ASIDE. Accordingly,
accused-appellant Dave Claudel y Lucas is ACQUITTED of the [5]
 Id.
crime charged on the ground of reasonable doubt, and is
ORDERED IMMEDIATELY RELEASED from detention unless [6]
 Id. at 4-7.
he is being lawfully held for another cause. Let an entry of final
judgment be issued immediately. [7]
 Id. at 7-8.

Let a copy of this Decision be furnished the Superintendent of [8]

 Supra note 3.
the New Bilibid Prison, Muntinlupa City, for immediate
implementation. The said Superintendent [9]
 CA rollo, p. 75.
is ORDERED to REPORT to this Court within five (5) days from
receipt of this Decision the action he has taken. [10]
 Id.

Further, the National Police Commission is [11]

 Id. at 78.
hereby DIRECTED to CONDUCT AN INVESTIGATION on the
police officers involved in the buy-bust operation conducted in [12]
 Id. At 78-79.
this case.
[13]
 Supra note 2.
 of the accused or the person/s from whom such items were
[14]
 Rollo, p. 16. confiscated and/or seized, or his/her representative or counsel,
a representative from the media and the Department of Justice
[15]
 Id. at 9. (DOJ), and any elected public official who shall be required to
sign the copies of the inventory and be given a copy thereof[.]
[16]
 Id. at 12.
[24]
 See RA 9165, Art. II, Sec. 21 (1) and (2).
[17]
 Id.
[25]
 IRR of RA 9165, Art. II, Sec. 21 (a).
[18]
 Id. at 14.
[26]
 People v. Sanchez, 590 Phil. 214, 234 (2008).
 People v. Sagana, G.R. No. 208471, August 2, 2017, 834
[19]

SCRA 225, 240.  People v. Ceralde, G.R. No. 228894, August 7, 2017, 834
[27]

SCRA 613, 624-625.

[20]
 Derilo v. People, 784 Phil. 679, 686 (2016).
[28]
 People v. Almorfe, 631 Phil. 51, 60 (2010).
[21]
 People v. Alvaro, G.R. No. 225596, January 10, 2018, p. 9.
[29]
 People v. De Guzman, 630 Phil. 637, 649 (2010).
[22]
 People v. Manansala, G.R. No. 229092, February 21, 2018, p.
5. [30]
 People v. Gonzales, 708 Phil. 121, 123 (2013).
[23]
 The said section reads as follows: [31]
 TSN dated August 20, 2009, pp. 13-15.

SEC. 21. Custody and Disposition of Confiscated, Seized, and/or [32]

 G.R. No. 228890, April 18, 2018.
Surrendered Dangerous Drugs, Plant Sources of Dangerous
Drugs, Controlled Precursors and Essential Chemicals, [33]
 736 Phil. 749 (2014).
Instruments/Paraphernalia and/or Laboratory Equipment. – The
PDEA shall take charge and have custody of all dangerous [34]
 People v. Tomawis, supra note 32 at 11-12.
drugs, plant sources of dangerous drugs, controlled precursors
and essential chemicals, as well as instruments/paraphernalia [35]
 TSN dated August 20, 2009, p. 15.
and/or laboratory equipment so confiscated, seized and/or
surrendered, for proper disposition in the following manner: [36]
 Id.

(1) The apprehending team having initial custody and control of [37]
 Id. at 5-6.
the drugs shall, immediately after seizure and confiscation,
physically inventory and photograph the same in the presence [38]
 Id. at 4.
 [54]
 People v. De la Cruz, 666 Phil. 593, 605 (2011).
[39]
 G.R. No. 231989, September 4, 2018.
[55]
 TSN dated August 20, 2009, p. 13.
 Id. at 13, citing People v. Sipin, G.R. No. 224290, June 11,
[40]

2018, p. 17. [56]

 Id. at 14.
[41]
 RA 9165, Sec. 21(1), as amended by RA 10640, Sec. 1. [57]
 Rollo, p. 7.
[42]
 People v. Beran, 724 Phil. 788, 822 (2014). [58]
 Id.
[43]
 People v. Reyes, 797 Phil. 671, 690 (2016). [59]
 Id. at 8.
[44]
 People v. Sumili, 753 Phil. 342, 350 (2015). [60]
 Id.
[45]
 797 Phil. 671 (2016). [61]
 Id.
[46]
 Id. at 690. [62]
 Id.

 CONSTITUTION, Art. III, Sec. 14(2): "In all criminal

[47] [63]
 People v. Daria, Jr., 615 Phil. 744, 767 (2009).
prosecutions, the accused shall be presumed innocent until the
contrary is proved x x x."  See People v. Jugo, G.R. No. 231792, January 29, 2018, p.
[64]

10.
[48]
 People v. Belocura, 693 Phil. 476, 503-504 (2012).
[49]
 People v. Mendoza, supra note 33 at 769.
[50]
 Id. at 770.
[51]
 People v. Catalan, 699 Phil. 603, 621 (2012).
[52]
 393 Phil. 68, 133 (2000).
Source: Supreme Court E-Library | Date created: June 19,
 People v. Mateo,  582 Phil. 390, 410 (2008), citing People v.
[53] 2019 
Ong, 476 Phil. 553 (2004) and People v. Juatan, 329 Phil. 331, This page was dynamically generated by the E-Library Content
337-338 (1996). Management System

Supreme Court E-Library
SECOND DIVISION
[ G.R. No. 218516, March 27, 2019 ]
DAVAO ACF BUS LINES, INC., PETITIONER, V. ROGELIO
ANG, RESPONDENT.
D E C I S I O N
CAGUIOA, J:  damages; P100,000.00 as exemplary damages; and P50,000.00
Before this Court is a Petition for Review
on Certiorari[1] (Petition) under Rule 45 of the Rules of Court
filed by petitioner Davao ACF Bus Lines, Inc. (ACF) assailing the
Decision[2] dated June 27, 2014 (assailed Decision) and
Resolution[3] dated May 5, 2015 (assailed Resolution) of the
Court of Appeals[4] (CA) in CA-G.R. SP No. 04400-MIN, which
affirmed the Regional Trial Court of Davao City, Branch 16's
(RTC) Decision[5] dated February 23, 2011 (RTC Decision) in SP
Civil Case No. 31,984-07.
The Facts and Antecedent Proceedings
As narrated by the CA in its assailed Decision, the essential
facts and antecedent proceedings of the instant case are as
follows:
The present controversy is a consequence of the execution of
judgment in the case of People of the Phils. vs. Rodolfo Borja
Tanio, " for Reckless Imprudence Resulting in Serious Physical
Injuries, docketed as Criminal Case No. 99,282-E-2000 filed
before the Municipal Trial Court in Cities (MTCC), Branch 5,
Davao City, wherein accused Rodolfo Borja Tanio [(Tanio)], then
the driver of a Daewoo Bus with plate number LVX-883,
registered under the name of [ACF] was charged with reckless
imprudence resulting in serious physical injuries.[6] The crime
charged was an offshoot of an incident wherein Tanio bumped a
Mitsubishi sedan driven by one Leo B. Delgara causing damage
to the said vehicle and inflicting serious physical injuries upon
its passenger, [herein] respondent Rogelio Bajao Ang [(Ang)].
In a Judgment[7] dated December 27, 2005, the MTCC convicted
Tanio and awarded in favor of [Ang] the following damages:
P500,000.00 as nominal damages; P250,000.00 as moral
as attorney's fees. No appeal from the judgment was interposed,
and in time, the decision became final and executory. In view of
its finality, the prosecution filed a Motion for Execution against
the accused Tanio which was granted. However, the writ was
returned unsatisfied as the latter had allegedly no properties
that can be levied to satisfy the money judgment. Hence, upon
motion, the MTCC issued a writ of execution against [ACF,]
being the employer of accused Tanio.
Consequently, [ACF] filed a Motion to Recall and/or Quash The
Writ of Execution[8] against it which was, however, denied by the
MTCC in its Order[9] dated March 21, 2007, thus:
WHEREFORE, PREMISES CONSIDERED, the Motion to Recall
and/or Quash The Writ of Execution filed by ACF Bus Lines,
Inc. is hereby DENIED for the reasons above stated. However,
the implementation of the Writ of Execution issued against ACF
Bus Lines, Inc. is hereby ordered to be held in abeyance
pending the determination of the existence of the requisites for
subsidiary liability under Article 103 of the Revised Penal Code
to attach. For this reason, for the purpose of determining (1) the
existence of an employer-employee relationship; (2) that the
employer is engaged in some kind of industry; (3) that the
employee is adjudged guilty of the wrongful act and found to
have committed the offense in the discharged (sic) of his duties
(not necessarily any offense he commits "while" in the discharge
of such duties; (4) that said employee is insolvent, this case is
set for hearing on May 03, 2007, at 8:30 in the morning where
both the prosecution and [ACF] shall be required to present
evidence to prove or disprove the existence of the foregoing
elements.
SO ORDERED.
[ACF] moved for a reconsideration [of the said Order,[10]] but
[this] was denied by the MTCC in its Order[11] dated May 18,
2007.
In view of the denial, petitioner filed before [the] [RTC] a Petition
for Review on Certiorari[12] under Rule 65 of the Rules of Court,
docketed as Civil Case No. 31,984-07, praying among others,
that the March 21, 2007 and May 18, 2007 Orders of the MTCC
be nullified.
In its now assailed [Decision], the RTC denied [ACF's] petition
for certiorari, to wit:
WHEREFORE, premises considered, the Petition is DENIED.
The Municipal Trial Court in Cities, Branch 5, Davao City is
directed to proceed with the hearing for the determination of
whether or not the requisites under Article 103 of the Revised
Penal Code are present to issue the Writ of Execution against
the employer.
SO ORDERED. [(Emphasis in the original)]
[ACF's] motion for reconsideration[13] was denied by the RTC in
its Order dated April 4, 2011.
On May 27, 2011, [ACF] filed a Notice of Appeal.[14]
The Ruling of the CA
In its assailed Decision, the CA denied the appeal filed by ACF,
the dispositive portion of which states that:
WHEREFORE, premises considered, the instant appeal is
hereby DENIED and the assailed Decision dated February 23,
2011 of the Regional Trial Court, Branch 16, Davao City in Civil
Case No. 31,984-07 is AFFIRMED.
SO ORDERED.[15]
The CA held that the RTC did not err in holding that the
Municipal Trial Court in Cities (MTCC) did not commit grave
abuse of discretion in issuing its Order denying ACF's Motion to
Recall and/or Quash The Writ of Execution and ordering the
conduct of a hearing to determine whether ACF should be held
subsidiarily liable under Article 103 of the Revised Penal Code
for the civil liability ex delicto of its employee, accused Tanio.
ACF filed a Motion for Reconsideration[16] assailing the aforesaid
Decision of the CA, which was eventually denied by the latter in
its Resolution dated May 5, 2015.[17]
Hence, ACF filed the instant Petition under Rule 45 of the Rules
of Court, asking this Court to reverse the CA's assailed Decision
and Resolution.
Issue
Stripped to its core, the critical question to be resolved by the
Court is whether the CA was correct in affirming the RTC's
holding that the MTCC did not commit grave abuse of discretion
amounting to lack or excess of jurisdiction in issuing its Order
denying ACF's Motion to Recall and/or Quash The Writ of
Execution and ordering the conduct of a hearing to determine
whether or not ACF should be held subsidiarily liable under
Article 103 of the Revised Penal Code for the civil liability ex
delicto of its employee, accused Tanio.
The Court's Ruling
The aforesaid question should be answered in the affirmative;
the instant appeal is denied.
ACF's argument that grave abuse of discretion was purportedly
committed by the MTCC centers primarily on the latter court's
supposed erroneous Order directing the execution of judgment
against ACF with respect to the civil liability ex delicto of its
employee, accused Tanio, for nominal, moral, and exemplary
damages, and attorney's fees. ACF alleges that the said order of
execution was issued by the MTCC with grave abuse of
discretion because, to begin with, the MTCC's final and
executory Judgment dated December 27, 2005 convicting
accused Tanio is supposedly null and void.
Simply stated, ACF ascribes grave abuse of discretion on the
part of the MTCC for ordering the execution upon ACF for
subsidiary civil liability ex delicto of the latter's employee based
on a judgment that is supposedly void.
ACF's arguments fail to convince.
First and foremost, it must be stressed that the basic factual
premise of ACF is mistaken. ACF alleges that the MTCC has
ordered the execution upon ACF as regards the subsidiary civil
liability ex delicto of ACF's employee, accused Tanio. The facts
clearly belie that assertion.
In the Order dated March 21, 2007 issued by the MTCC, which
ACF alleges is tainted with grave abuse of discretion, the MTCC
actually ordered that "the implementation of the Writ of
Execution issued against ACF Bus Lines, Inc. is hereby
ordered to be held in abeyancepending the determination of
the existence of the requisites for subsidiary liability under
Article 103 of the Revised Penal Code to attach."[18] In fact, the
MTCC ordered the conduct of a hearing "where both, the
prosecution and [ACF] shall be required to present evidence to
prove or disprove the existence of the foregoing elements."[19]
Hence, with the very act alleged to be stained with grave abuse
of discretion on the part of the MTCC, i.e., the implementation
of the Writ of Execution against ACF, having not been
committed at all, on this point alone, the instant Petition should
already be dismissed for lack of merit.
Further, it must be stressed that, as correctly held by the
CA, certiorari is a remedy designed for the correction of errors of
jurisdiction, not errors of judgment. When a court exercises its
jurisdiction, an error committed while so engaged does not
deprive it of the jurisdiction being exercised when the error was
committed. Otherwise, every error committed by a court would
deprive it of its jurisdiction and every erroneous judgment
would be a void judgment. This cannot be allowed.[20]
The administration of justice would not survive such a rule.
Consequently, an error of judgment that the court may commit
in the exercise of its jurisdiction is not correctible through the
original civil action of certiorari.[21] Even if the findings of the
court are incorrect, as long as it has jurisdiction over the
case, such correction is normally beyond the province
of certiorari.[22]
In the instant case, the primary argument of ACF is centered on
the supposed erroneous award of damages against the ACF's
employee, accused Tanio, made by the MTCC in its Judgment
dated December 27, 2005 convicting the latter. But as amply
explained by the court a quo, such supposed errors merely
pertain only to mistakes of law and not of jurisdiction, thus
putting them beyond the ambit of certiorari.
Furthermore, ACF's act of assailing the award of damages made
by the MTCC in its Judgment dated December 27, 2005 is
tantamount to an attack against a final and executory
judgment, being a clear violation of the doctrine of immutability
of judgment.
It must be emphasized that the aforesaid Judgment of the
MTCC awarding civil indemnity, which is now being assailed by
ACF, was not appealed; thus making it final and executory.
Hence, ACF cannot now assail the MTCC's Judgment lest the
elementary principle of immutability of judgments be
disregarded. It is established that once a judgment attains
finality, it thereby becomes immutable and unalterable. Such
judgment may no longer be modified in any respect, even if the
modification is meant to correct what is perceived to be an
erroneous conclusion of fact or law, and regardless of whether
the modification is attempted to be made by the court rendering
it or by the highest Court of the land. The doctrine is founded
on considerations of public policy and sound practice that, at
the risk of occasional errors, judgments must become final at
some definite point in time.[23]
While it is true that the rule on the immutability and finality of
judgments admits of certain exceptions, such as when the
questioned final and executory judgment is void,[24] a catena of
cases has held that a mere erroneous judgment, though
rendered according to the course and practice of the court is
contrary to law, is not a void judgment.[25] A wrong judgment is
not a void judgment, provided the court which renders it had
jurisdiction to try the case.[26]
To reiterate, ACF merely questions the issuance of the MTCC's
Judgment dated December 27, 2005 mainly on the basis of the
supposed erroneous awarding of civil indemnity. Hence,
assuming arguendo that the MTCC's act of awarding damages
was wrong, such does not make the Judgment void as an
exception to the principle of immutability of judgments,
considering that the court indisputably had jurisdiction to try
the case.
Lastly, ACF inserted a novel argument raised for the first time
on appeal in the instant Petition: that is,
assuming arguendo that Ang is entitled to civil indemnity, the
MTCC was supposedly divested with jurisdiction to render
judgment on the damages "considering that the aggregate
amount of damages is P900,000.00 which amount is way
beyond the jurisdiction of the MTCC to grant."[27]
Not only is the foregoing assertion an argument that should be [6]
 Id. at 35-40.
denied for being raised for the first time on appeal,[28] such
argument is patently erroneous. As it is a basic rule that [7]
 Id. at 41-44.
jurisdiction over the subject matter is determined by the
allegations in the complaint,[29] it is an established principle [8]
 Id. at 45-49.
that jurisdiction is not determined by the amount
ultimately substantiated and awarded by the trial court.[30]
 Id. at 50-53-A. Penned by Presiding Judge Daydews D.
[9]

Villamor.
Therefore, for the foregoing reasons, the instant Petition is
without merit and should be denied. [10]
 Id. at 54-55.
WHEREFORE, the appeal is hereby DENIED. The Decision [11]
 Id. at 56.
dated June 27, 2014 and Resolution dated May 5, 2015 issued
by the Court of Appeals in CA-G.R. SP No. 04400-MIN
are AFFIRMED.
[12]
 Id. at 57-69.

SO ORDERED.
[13]
 Id. at 75-83.

Carpio, (Chairperson), Perlas-Bernabe, J. Reyes, Jr.,

[14]
 Id. at 22-24.
and Lazaro-Javier, JJ., concur. 
[15]
 Id. at 31.

[1]
 Rollo, pp. 4-20. [16]
 Id. at 84-93.

 Id. at 22-31. Penned by Associate Justice Edward B.

[2] [17]
 Id. at 33-34.
Contreras with Associate Justices Edgardo T. Lloren and Rafael
Antonio M. Santos, concurring. [18]
 Id. at 53-A; emphasis and underscoring supplied.
[3]
 Id. at 33-34. [19]
 Id.
[4]
 Twenty-Third Division.  Vios v. Pantangco, Jr., 597 Phil. 705, 720 (2009),
[20]

citing People v. Judge Laguio, Jr., 547 Phil. 296, 316 (2007).

 Rollo, pp. 70-74. Penned by Presiding Judge Emmanuel C.
[5]

Carpio. [21]
 Id.
  Vios v. Pantangco, Jr., id., citing People v. Judge Laguio,
[22]

Jr., id. at 317. Supreme Court E-Library

 Office of the Ombudsman v. Borja, 772 Phil. 470, 479-480

[23]

(2015).

[24]
 See Heirs of Maura So v. Obliosca, 566 Phil. 397, 408 (2008).

[25]
 Barco v. Court of Appeals, 465 Phil. 39, 62 (2004).

 Villanueva v. CFI of Oriental Mindoro, Pinamalayan, Br. II,

[26]

204 Phil. 629 (1982).

[27]
 Rollo, p. 14.

 Chinatrust (Phils.) Commercial Bank v. Turner, G.R. No.

[28]

191458, July 3, 2017, 828 SCRA 499, 515.

[29]
 Mendoza v. Germino, 650 Phil. 74, 81 (2010).

[30]
 Dionisio v. Puerto, 158 Phil. 671, 677 (1974).

Source: Supreme Court E-Library | Date created: June 03,

2019 
This page was dynamically generated by the E-Library Content
Management System

EN BANC
[ G.R. No. 237987, March 19, 2019 ]
DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS, REGION
IV-A AND GENEVIEVE E. CUARESMA, AS ONE OF THE
CERTIFYING OFFICERS AT THE TIME OF THE GRANT OF
THE ASSAILED CNA INCENTIVE,* PETITIONERS, VS.
COMMISSION ON AUDIT, RESPONDENT.
DECISION
REYES, J. JR., J.:  Later, the DPWH Regional Office No. IV-A (DPWH IV-A) released
This is a petition for certiorari under Section 1, Rule 64 of the
Rules of Court which seeks to set aside the Decision No. 2016-
377[1] dated November 10, 2016 and the Resolution No. 2017-
458[2] dated December 27, 2017 of the respondent Commission
on Audit (COA), which affirmed Decision No. 2013-29[3] dated
October 21, 2013 of the COA Regional Office No. IV-A (COA IV-
A), which in turn affirmed Notice of Disallowance (ND) No. 09-
01-101-(09) dated December 14, 2009.[4]
The Facts
On December 16, 2008, the Department of Public Works and
Highways (DPWH), Central Office, through then Secretary
Hermogenes E. Ebdane, Jr. (Secretaiy Ebdane), issued a
memorandum[5] authorizing the grant of Collective Negotiation
Agreement (CNA) Incentive to rank-and-file employees in the
DPWH for calendar year 2008. The memorandum provides,
among others, that:
3. That the CNA Incentive shall be paid out of savings generated
from the Maintenance and Other Operating Expenses (MOOE),
completed projects and Engineering and Administrative
Overhead (EAO) of each office (Central Office and Regional and
District Offices), subject to the usual accounting and auditing
rules and regulations[.][6]
The memorandum was issued pursuant to Administrative Order
(A.O.) No. 135, Series of 2005 dated December 27, 2005, which
confirmed the grant of CNA Incentive to rank-and-file employees
in government agencies; and Public Sector Labor-Management
Council (PSLMC) Resolution No. 04, Series of 2002, which
supplied the guidelines for the grant of CNA Incentive to rank-
and-file employees in national government agencies (NGAs),
state universities and colleges (SUCs), and loca government
units (LGUs).
CNA Incentive for calendar year 2008 to its employees and
officers amounting to P3,915,000.00.
On January 6, 2010, DPWH IV-A received a copy of ND No. 09-
01-101-(09) dated December 14, 2009, signed by the Regional
Audit Team Leader and Supervising Auditor, both of the COA
IV-A. The COA auditors explained that the CNA Incentive in the
amount of P3,915,000.00 was disallowed because it was paid
out of the Engineering and Administrative Overhead (EAO), in
violation of the Department of Budget and Management (DBM)
Budget Circular No. 2006-1, issued on February 1, 2006, which
states that CNA Incentive shall be sourced solely from the
Maintenance and Other Operating Expenses (MOOE).
The COA auditors also identified several DPWH IV-A personnel
whom they found to be liable for the illegal payment of the
subject CNA Incentive. Among those found to be liable is herein
petitioner Genevieve E. Cuaresma (Cuaresma), who was then
the Chief Accountant of DPWH IV-A and who certified the
availability of funds, completeness of the supporting
documents, and validity of the obligation for the payment of the
subject CNA Incentive.
On May 26, 2010, DPWH IV-A Regional Director Marcelina N.
Ocampo (Director Ocampo) sent a letter, by way of an appeal, to
the COA IV-A.
Ruling of COA Regional Office IV-A
In its Decision No. 2013-29 dated October 21, 2013, the COA
IV-A dismissed Director Ocampo's appeal. COA IV-A stressed
that the MOOE shall be the sole source of the CNA Incentive as
expressly provided for in Budget Circular No. 2006-1; and that
only rank-and-file employees may be granted the benefit of the
said incentive. Thus, it ruled that the release of the subject CNA
Incentive, charged from DPWH IV-A's EAO, to the DPWH IV-A
employees including officers with salary grades 24 and above,
was illegal. The dispositive portion of the said decision states:
All told, the questioned Incentive may not be charged to EAO,
hence, the instant Appeal is hereby DISMISSED for lack of
merit. ND No. 2009-01-101-09 is hereby AFFIRMED.[7]
Unconvinced, the DPWH IV-A Employees Association,
represented by its president, Engineer Diosdado J. Villanueva
(Engr. Villanueva) elevated an appeal,[8] which was treated as a
petition for review, to the COA Proper.
Ruling of the COA
In its assailed Decision[9] No. 2016-377 dated November 10,
2016, the COA denied DPWH IV-A Employees Association's
petition. The COA concurred with COA IV-A's conclusion that
DPWH IV-A violated DBM Budget Circular No. 2006-1 when it
paid the CNA Incentive out of the savings from the EAO, instead
of the MOOE. Further, the COA observed that DPWH IV-A and
its Employees Association failed to show any proof of the cost-
cutting measures it undertook to generate savings as required
under DBM Budget Circular No. 2006-1, PSLMC Resolution No.
4, Series of 2002, and Section 3 of A.O. No. 135, Series of 2005.
The dispositive portion of the assailed decision provides:
WHEREFORE, premises considered, the Petition for Review of
Engr. Diosdado J. Villanueva, President, Department of Public
Works and Highways (DPWH) Region IV-A Employees
Association, of Commission on Audit Regional Office (RO) No.
IV-A Decision No. 2013-29 dated October 21, 2013 is
hereby DENIED. Accordingly, Notice of Disallowance No. 2009-
01-101-(09) dated December 14, 2009 on the payment of 2008
Collective Negotiation Agreement incentive to officials and
employees of DPWH RO No. IV-A in the total amount of
P3,915,000.00 is AFFIRMED.[10]
DPWH IV-A Employees Association, through Engr. Villanueva,
moved for reconsideration, but the same was denied by the COA
in its Resolution[11] No. 2017-458 dated December 27, 2017. In
denying the motion for reconsideration, the COA maintained
that the CNA Incentive could not be validly sourced from the
EAO. It stressed that DBM Budget Circular No. 2006-1 is clear
on this point. Further, it reiterated the liability of the officers
who approved the invalid release of the CNA Incentive as well as
the officers who certified the availability of funds and sufficiency
of documents necessary for such release. It, however, clarified
that the officers and employees who were mere passive
recipients of the said benefit need not refund the amounts they
received in good faith. The dispositive portion of the resolution
states:
WHEREFORE, premises considered, the Motion for
Reconsideration of Engr. Diosdado J. Villanueva, President,
Department of Public Works and Highways (DPWH) Regional
Office (RO) No. IV-A Employees Association, is hereby DENIED
with FINALITY. Accordingly, Commission on Audit (COA)
Decision No. 2016-377 dated November 10, 2016, denying the
Petition for Review of COA RO No. IV-A Decision No. 2013-29
dated October 21, 2013 and affirming Notice of Disallowance
No. 09-01-101-(09) dated December 14, 2009, on the payment
of Collective Negotiation Agreement Incentive for calendar year
2008 to officials and employees of DPWH RO No. IV-A in the
total amount of P3,915,000.00, is AFFIRMED. However, passive
recipients need not refund the benefits they received in good
faith, while the approving/certifying officers remain solidarity
liable for the entire amount of disallowance based on
the Silang case.[12]
On February 28, 2018, Cuaresma received a copy of the COA
Resolution No. 2017-458. Considering that she was among
those found to be liable for the disallowed incentive, Cuaresma
was prompted to file this petition.
The Issues
I.
WHETHER OR NOT THE GRANT OF THE CNA INCENTIVE IS
VALID AND SUPPORTED BY LAW AND OTHER PERTINENT
RULES AND REGULATIONS.
II.
WHETHER OR NOT RESPONDENT COA ACTED WITH GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS
OF JURISDICTION IN DENYING WITH FINALITY THE MOTION
FOR RECONSIDERATION OF ENGR. DIOSDADO J.
VILLANUEVA AND FURTHER AFFIRMED THE DECISION NO.
2016-377 DATED NOVEMBER 10, 2016, DENYING THE
PETITION FOR REVIEW OF COA RO NO. IV-A DECISION NO.
2013-29 DATED OCTOBER 21, 2013 AND AFFIRMING THE
NOTICE OF DISALLOWANCE NO. 09-01-101-(09) DATED
DECEMBER 14, 2009, ON THE PAYMENT OF COLLECTIVE
NEGOTIATION AGREEMENT INCENTIVE FOR CALENDAR
YEAR 2008 TO OFFICIALS AND EMPLOYEES OF DPWH RO
NO. IV-A IN THE TOTAL AMOUNT OF PHP3,915,000.00.
III.
WHETHER OR NOT RESPONDENT COA ACTED WITH GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS
OF JURISDICTION IN MODIFYING THE SAID DECISION AND
DECLARING THAT PASSIVE RECIPIENTS NEED NOT REFUND
THE BENEFITS THEY RECEIVED IN GOOD FAITH, WHILE THE
APPROVING/CERTIFYING OFFICERS REMAIN SOLIDARILY
LIABLE FOR THE ENTIRE AMOUNT OF DISALLOWANCE
BASED ON SILANG CASE.[13]
Cuaresma insists that the subject CNA Incentive was validly
paid out of the EAO. She argues that payment of the CNA
Incentive out of the savings from the EAO in lieu of the MOOE
is allowed under the General Appropriations Act (GAA) because
MOOE and EAO serve substantially the same purpose.
According to her, this intent could be gleaned from the budget
deliberations of the DPWH in Congress, where the reason for
the reduction of DPWH's MOOE was discussed.
Cuaresma further argues that she should not be held liable for
the amount of the disallowance. She explains that she merely
relied on the authority given by then DPWH Secretary Ebdane,
when the latter issued a memorandum stating that the CNA
Incentive may be paid out of the savings from the EAO.
Lastly, Cuaresma avers that the COA committed grave abuse of
discretion amounting to lack or in excess of jurisdiction when it
disallowed the subject CNA Incentive. She asserts that DPWH
IV-A was among the offices singled out by the COA concerning
the disallowance of the CNA Incentive. She claims that there
were other offices which granted the CNA Incentive sourced
from the savings from EAO but these releases were allowed.
Cuaresma further points out that the DPWH IV-A's CNA
Incentive for calendar year 2007, or for the previous year, was
also paid out of the savings from the EAO. Surprisingly,
however, the COA did not disallow the release of this incentive.
In its Comment[14] dated August 23, 2018, the COA, through the
Office of the Solicitor General, maintains that the subject CNA
Incentive was invalidly released and paid out of the savings
from the EAO. It counters that DBM Budget Circular No. 2006-
1 unequivocally states that the CNA Incentive shall be sourced
solely from the savings from the MOOE and to no other fund.
As to Cuaresma's defense that she merely relied on the
authority given by Secretary Ebdane, the COA stresses that the
December 16, 2008 memorandum itself cited A.O. No. 135,
Series of 2005 as its basis and even specified that the CNA
Incentive shall be subject to the usual accounting and auditing
rules and regulations. As such, the authority under the
aforesaid memorandum must be consistently implemented with
the procedural guidelines and be subjected to the conditions
imposed under DBM Budget Circular No. 2006-1.
From the submissions of the parties, the issues to be resolved
by the Court could be summarized as follows: (1) whether the
COA committed grave abuse of discretion amounting to lack or
in excess of jurisdiction when it disallowed the subject CNA
Incentive; and (2) whether the COA committed grave abuse of
discretion amounting to lack or in excess of jurisdiction when it
adjudged certain DPWH IV-A officers, including Cuaresma,
liable for the amount of the disallowance, while passive
recipients were not ordered to share in the liability.
The Court's Ruling
The petition is partly meritorious.
The COA did not commit any grave abuse of discretion when it
disallowed the subject CNA incentive.
In the discharge of its constitutional mandate, the COA is
endowed with enough latitude to determine, prevent and
disallow irregular, unnecessary, excessive, extravagant, or
unconscionable expenditures of government funds. It has the
power to ascertain whether public funds were utilized for the
purpose for which they had been intended.[15] The 1987
Constitution has expressly made the COA the guardian of
public funds, vesting it with broad powers over all accounts
pertaining to government revenue and expenditures and the
exclusive authority to define the scope of its audit and
examination, establishing the techniques and methods for such
review, and to promulgate accounting and auditing rules.[16]
The grant of CNA Incentive in favor of the employees in the
NGAs, such as the DPWH, is governed by PSLMC Resolution
No. 4, Series of 2002, A.O. No. 135, Series of 2005, and DBM
Budget Circular No. 2006-1.
PSLMC Resolution No. 4, Series of 2002, authorized the grant of
CNA Incentive for employees in the NGAs, SUCs, and LGUs. It
states that CNA Incentive may be provided in the CNAs between
the government agency and the employees association therein
in recognition of the joint efforts of labor and management to
achieve all planned targets, programs, and services approved in
the budget of the agency at a lesser cost.[17]The resolution also
provided guidelines which must be followed in the grant of of
CNA Incentive to employees in NGAs, SUCs, and LGUs. Among
these is Section 1 which mandated that only the savings
generated after the signing of the CNA may be used for the CNA
Incentive;[18]and Section 2 which required the inclusion of
provisions on cost-cutting measures and systems improvement
that will be undertaken by both the management and the labor
organization to ensure that savings will be generated after the
signing of each CNA.[19]
A.O. No. 135, Series of 2005, confirmed the grant of CNA
Incentive under PSLMC Resolution No. 4, Series of 2002. It
reiterated that CNA Incentive shall be sourced solely from the
savings generated during the life of the CNA,[20] and that there
must be provisions on cost-cutting measures in the CNA.[21] It
further clarified that CNA Incentive may be extended to rank-
and-file employees only.[22]
Finally, DBM Budget Circular No. 2006-1 provided limitations
and conditions for the grant of CNA Incentive. Among these is
Item No. 7, which specified the fund from which the CNA
Incentive may be sourced.
7.0Funding Source
7.1The CNA Incentive shall be sourced solely from
savings from released Maintenance and Other
Operating Expenses (MOOE) allotments for the year
under review, still valid for obligation during the year
of payment of the CNA, subject to the following
conditions:
7.1.1Such savings were generated out of the cost- cutting
measures identified in the CNAs and supplements
thereto;
7.1.2Such savings shall be reckoned from the date of
signing of the CNA and supplements thereto;
7.1.3Such savings shall be net of the priorities in the use
thereof such as augmentation of amounts set aside
for compensation, bonus, retirement gratuity,
terminal leave benefits, old-age pension of veterans
and other personnel benefits authorized by law and
in special and general provisions of the annual
General Appropriations Act, as well as other MOOE
items found to be deficient. Augmentation shall be
limited to the actual amount of deficiencies
incurred; and
7.1.4The basic rule that augmentation can be done only
if there is deficiency in specific expenditure items,
should be strictly observed. (Emphasis supplied)
Clear from the foregoing is that CNA Incentive may not be
allocated out of the savings of any fund. To be valid, the CNA
Incentive must be released from the savings of the MOOE. In
this case, there is no dispute that the subject CNA Incentive
was paid out of the savings from the EAO. The violation of the
provisions of DBM Budget Circular No. 2006-1 is glaring. Thus,
the COA correctly affirmed ND No. 09-01-101-(09) as there are
factual and legal justifications therefor.
Cuaresma, however, insists that savings from the EAO may be
used to pay CNA Incentive considering that EAO and MOOE
serve the same purpose. She pointed out that DPWH's MOOE
was reduced because its EAO may be used to cover for the
department's administrative expenses. She cited the following
exchange during the budget deliberation before the Committee
on Appropriations hearing on September 22, 2010 in support of
her argument:
REP. ACHARON:
xxxx
No, you reported that the budget, as I've seen it, [is] really
declining from 2009 to x x x last year x x x including the other
operating expenses in different regional offices. Is that correct?
So how will you appropriate this money when you reduce it by
almost 55 percent. You mean to say that other regional offices
will no longer have electricity or water? How's that?
MR. SINGSON: Your Honor, there is also what we call
engineering administrative overhead, that is between 3 and 3.5
percent that is provided for the various regions and districts for
overhead expenses and operating expenses, Your Honor.
REP. ACHARON: Okay, so you charge it to the indirect cost of
the project. Okay. So I hope that there will be no complaints
from regional offices that they can no longer pay their x x x. [23]
The Court is not convinced.
In the first place, the cited exchange does not have any material
relation to the issue at hand. The Court notes that the subject
hearing before the Committee on Appropriations on September
22, 2010 was for the purpose of enacting the 2011 GAA. On the
other hand, the issue in this case involves the disallowance of a
disbursement of a fund from the 2008 GAA.
Moreover, nothing in the cited exchange would support
Cuaresma's conclusion that savings from the EAO may be used
to pay the CNA Incentive in lieu of the savings from the MOOE.
While former DPWH Secretary Rogelio Singson explained that
the EAO fund may be used for the administrative expenses of
the DPWH and its regional offices, he never suggested that
savings from the EAO may also be the source of the CNA
Incentive. Thus, the Court concurs with the COA's observation:
Further, the TSN shows that Secretary Singson proposed the
reduction of DPWH's MOOE considering that there were other
sources of funds to cover DPWH administrative expenses such
as the EAO. The House of Representatives only confirmed the
proposed budget of DPWH for 2011 and did not, in any way,
declare that EAO can be used as a source of CNA incentive in
lieu of MOOE. The approval of the proposed budget of DPWH is
not a blanket authority to use the EAO fund without complying
with the existing laws and regulations.[24]
Cuaresma also faults the COA for allegedly being selective when
it disallowed the subject CNA Incentive. She claims that there
were other departments and regional offices which sourced their
respective CNA Incentive from the EAO but the COA allowed
their releases. Thus, she alleges violation of the equal protection
clause.
This argument is misplaced.
In People v. Dela Piedra,[25] the Court declared that an erroneous
performance of statutory duty - such as an apparent selective
enforcement of the statute - could not be considered a violation
of the equal protection clause, unless the element of intentional
or purposeful discrimination is shown. In that case, the Court
ruled that there is no violation of the equal protection of the
laws in prosecuting only one of the many equally guilty persons.
This lone circumstance would not be sufficient to uphold the
claim of denial of the equal protection clause. Absent a clear
showing of intentional discrimination, the prosecuting officers
shall be presumed tc have regularly performed their official
duties. Thus:
The prosecution of one guilty person while others equally guilty
are not prosecuted, however, is not, by itself, a denial of the
equal protection of the laws. Where the official action
purports to be in conformity to the statutory classification,
an erroneous or mistaken performance of the statutory
duty, although a violation of the statute, is not without
more a denial of the equal protection of the laws. The
unlawful administration by officers of a statute fair on its face,
resulting in its unequal application to those who are entitled to
be treated alike, is not a denial of equal protection unless there
is shown to be present in it an element
of intentional or purposeful discrimination. This may appear on
the face of the action taken with respect to a particular class or
person, or it may only be shown by extrinsic evidence showing a
discriminatory design over another not to be inferred from the
action itself. But a discriminatory purpose is not presumed, there
must be a showing of "clear and intentional
discrimination." Appellant has failed to show that, in charging
appellant in court, that there was a "clear and intentional
discrimination" on the part of the prosecuting officials.
[26]
 (Emphasis supplied; citations omitted; italics in the original)
Like the prosecution which has been given the discretion to
prosecute whoever it believes to have committed a crime,
depending on its sound assessment of the evidence, the COA
has the authority to disallow disbursements of public funds if,
in its judgment, they were utilized in violation of its intended
purpose. Consequently, it is up to the person who claims to
have been the victim of selective enforcement to prove that the
same was made for a discriminatory purpose.
In this case, aside from her allegation that DPWH IV-A was
among those singled out by the COA concerning the
disallowance of the CNA Incentive, Cuaresma failed to present
even a single evidence to show that the disallowance of the
subject CNA Incentive was made pursuant to a discriminatory
purpose. Clearly, no violation of equal protection clause for
selective enforcement could be attributed to the COA as
Cuaresma failed to prove that there was intentional
discrimination.
Neither could the alleged allowance by the COA of the CNA
Incentive for calendar year 2007 be sufficient reason to
conclude that the commission is guilty of grave abuse of
discretion. Suffice it to state that the State cannot be put in
estoppel by the mistakes or errors of its officials or agents.
[27]
 The supposed error by the COA in allowing DPWH IV-A's
CNA Incentive for calendar year 2007, allegedly similarly
sourced from the savings from the EAO, is insufficient
justification to uphold the validity of the CNA Incentive in
question. A contrary ruling would compel the COA to
contravene its constitutional duty as the guardian of public
funds.
The COA erred when it absolved the DPWH IV-A employees who
received the benefit from any liability.
The Court concurs with the COA's pronouncement that
Cuaresma, as well as the other certifying and approving officers
of DPWH IV-A, must be held liable for the amount of the
disallowance.
In Manila International Airport Authority v. Commission on Audit,
[28]
 the Court held that officers of the Manila International
Airport Authority (MIAA) were not in the position to approve and
certify the funding for the CNA Incentive without assuring
themselves that the conditions imposed by PSLMC Resolution
No. 2, Series of 2003, are complied with. PSLMC Resolution No.
2 is the resolution governing the grant of CNA Incentive to
employees in Government Financial Institutions and
Government-Owned and Controlled Corporations, such as the
MIAA.
In this case, Cuaresma, as one of the certifying officers of
DPWH IV-A, was duty-bound to ensure compliance with the
conditions and limitations imposed in PSLMC Resolution No. 4,
Series of 2002, in relation to DBM Budget Circular No. 2006-1,
before she could issue certification on the availability of funds
for the subject CNA Incentive. Unfortunately, she failed in this
regard considering the non-observance with the limitation that
savings from MOOE shall be the sole source of CNA Incentive.
Hence, she must be held liable for the amount of the
disallowance.
Nevertheless, although the CNA Incentive released by the DPWH
IV-A was properly disallowed, the COA erred when it ruled that
the DPWH IV-A employees who benefited from the incentive
need not refund the amounts they received. The Court holds
that the DPWH IV-A employees are obliged to return the
amounts they received under the principle of unjust
enrichment.
Jurisprudence holds that there is unjust enrichment when a
person unjustly retains a benefit to the loss of another, or when
a person retains money or property of another against the
fundamental principles of justice, equity and good conscience.
The statutory basis for the principle of unjust enrichment is
Article 22 of the Civil Code which provides that "[e]very person
who through an act of performance by another, or any other
means, acquires or comes into possession of something at the
expense of the latter without just or legal ground, shall return
the same to him."
The principle of unjust enrichment under Article 22 requires
two conditions: (1) that a person is benefited without a valid
basis or justification, and (2) that such benefit is derived at
another's expense or damage. There is no unjust enrichment
when the person who will benefit has a valid claim to such
benefit.[29]
The conditions set forth under Article 22 of the Civil Code are
present in this case.
It is settled that the subject CNA Incentive was invalidly
released by the DPWH IV-A to its employees as a consequence
of the erroneous application by its certifying and approving
officers of the provisions of DBM Budget Circular No. 2006-1.
As such, it only follows that the DPWH IV-A employees received
the CNA Incentive without valid basis or justification; and that
the DPWH IV-A employees have no valid claim to the benefit.
Moreover, it is clear that the DPWH IV-A employees received the
subject benefit at the expense of another, specifically, the
government. Thus, applying the principle of unjust enrichment,
the DPWH IV-A employees must return the benefit they unduly
received.
The obligation of the DPWH IV-A employees to reimburse the
amounts they received becomes more obvious when the nature
of CNA Incentive as negotiated benefit is considered.
It must be recalled that CNA Incentive is granted as a form of
reward to motivate employees to exert more effort toward higher
productivity and better performance. However, before any CNA
Incentive may be granted, the CNA on which it is based must
first be negotiated, approved, and implemented. On the
negotiation and approval of CNAs, Rule XII of the Amended
Rules and Regulations Governing the Exercise of the Right of
Government Employees to Organize, provides:
RULE XII 
COLLECTIVE NEGOTIATIONS
Section 1. Subject of negotiation. - Terms and conditions of
employment or improvements thereof, except those that are
fixed by law, may be the subject of negotiation.
Section 2. Negotiable matters. - The following concerns may be
the subject of negotiation between the management and the
accredited employees' organization:
xxxx
(m) CNA incentive pursuant to PSLMC Resolution No. 4, s. 2002
and Resolution No. 2, s. 2003; and
(n) such other concerns which are not prohibited by law and
CSC rules and regulations.
xxxx
Section 4. Effectivity of CNA. - The CNA shall take effect upon
its signing by the parties and ratification by the majority of
the rank-and-file employees in the negotiating
unit. (Emphasis supplied)
Bersamin, C. J., on offiical business.
xxxx Carpio,** Peralta, Del Castillo, Perlas-Bernabe, Leonen, Jardeleza,
From the provisions of the aforecited rule, there are two Caguioa, A. Reyes, Jr., Gesmundo, Carandang, and Lazaro-
necessary steps which must be undertaken before the CNA Javier, JJ., concur.
Incentive could be released to the government employees: first, Hernando, J., on leave.
the negotiation between the government agency and the
employees' collective negotiation representative; and second, the
approval by the majority of the rank-and-file employees in the NOTICE OF JUDGMENT
negotiating unit. In the first step, the government employees
concerned participates through their duly-elected Sirs/Mesdames:
representative; in the second, the rank-and-file employees
participate directly. Thus, unlike ordinary monetary benefits Please take notice that on March 19, 2019 a Decision, copy
granted by the government, the CNA Incentive involve the attached herewith, was rendered by the Supreme Court in the
participation of the employees who are intended to be the
beneficiaries thereof.
above-entitled case, the original of which was received by this
Office on May 9, 2019 at 10:15 a.m.
In this case, the DPWH IV-A employees' participation in the
negotiation and approval of the CNA, whether direct or indirect, Very truly
certainly gives them the necessary information to know the yours,
requirements for the valid release of the CNA Incentive. Verily,
when they received the subject benefit, they must have known (SGD) EDGAR
that they were undeserving of it. O. ARICHETA
  Clerk of Court
WHEREFORE, the Decision No. 2016-377 dated November 10,
2016 and the Resolution No. 2017-458 dated December 27,
2017, both of the Commission on Audit, are hereby AFFIRMED  Also referred to as "CNA Incentives" in the Petition and in some
*

with MODIFICATION. The certifying and approving officers, as parts of the rollo.

well as all the employees of the DPWH IV-A who received the
subject CNA Incentive, are liable for the amount of the  Designated as Acting Chief Justice per Special Order No. 2644
**

disallowance. They must reimburse the amounts they received dated March 15, 2019.
through salary deduction, or through whatever mode of
payment the CO A may deem just and proper under the  Concurred in by COA Chairperson Michael G. Aguinaldo,
[1]

circumstances. Commissioner Jose A. Fabia and Commissioner Isabel D.

Agito; rollo, pp. 68-74.
SO ORDERED.
  Id. at 19-21. (The said Resolution was docketed as "Decision
[2] [17]
 PSLMC Resolution No. 4, Series of 2002, Section 1.
No. 2017-458.")
[18]
 Id.
 Penned by COA Regional Director Nilda M. Blanco; id. at 56-
[3]

60. [19]
 Id. at Section 2.
[4]
 Id. at 51. [20]
 Administrative Order No. 135, Series of 2005, Section 4.
[5]
 Id. at 47. [21]
 Id. at Section 3.
[6]
 Id. [22]
 Id. at Section 2.
[7]
 Id. at 59-60.  [23]
 Rollo, pp. 9; 64.
[8]
 Id. at 61-67. [24]
 Id. at 71.
[9]
 Supra note 1. [25]
 403 Phil. 31 (2001).
[10]
 Id. at 72-73.  [26]
 Id. at 54-55.
[11]
 Supra note 2.   Republic v. Intermediate Appellate Court, 284-A Phil. 528,
[27]

540 (1992); Republic v. Go Bon Lee, 111 Phil. 805, 809

[12]
 Id. at 20. (1961); Development Bank of the Philippines v. Commission on
Audit, 301 Phil. 207, 212 (1994).
[13]
 Id. at 7-8.
[28] 
681 Phil. 644 (2012).
[14]
 Id. at 95-109.
Car Cool Philippines, Inc. v. Ushio Realty & Development
[29] 

 Metropolitan Waterworks and Sewerage System v.

[15]
Corp., 515 Phil. 376, 384 (2006); Cabrera v. Ameco Contractors
Commission on Audit, G.R. No. 195105, November 21, 2017, Rental, Inc., G.R. No. 201560, June 20, 2012 (Minute
citing Sanchez v. Commission on Audit, 575 Phil. 428, 444-445 Resolution); Government Service Insurance System v.
(2008). Commission on Audit, 694 Phil. 518, 526 (2012).

 Id., citing Yap v. Commission on Audit, 633 Phil. 174, 189

[16]

(2010).

Source: Supreme Court E-Library | Date created: May 20,
2019  Quezon City, Branch 81, in Criminal Case No. Q-03-122084,
This page was dynamically generated by the E-Library Content
Management System
Supreme Court E-Library
FIRST DIVISION
[ G.R. No. 222337, July 23, 2018 ]
PEOPLE OF THE PHILIPPINES, PLAINTIFF-APPELLEE, V.
SHERNIEL UNGRIANO ASCARRAGA
A.K.A.SERGIO ONGRIANO ASCARRAGA, ACCUSED-
APPELLANT.
DECISION
DEL CASTILLO, J.: 
It is a well-settled principle that the assessment of the
credibility of a witness is best left to the trial court, most
especially when affirmed by the Court of Appeals (CA), as the
trial court had the unique opportunity to observe the witness'
deportment and demeanor on the witness stand.[1]
This is an appeal filed by appellant Sherniel Ungriano Ascarraga
a.k.a. Sergio Ongriano Ascarraga from the January 27, 2015
Decision[2] of the CA in CA-G.R CR-HC No. 04007, affirming the
March 16, 2009 Decision[3] of the Regional Trial Court (RTC) of
finding appellant guilty beyond reasonable doubt of murder.
Factual Antecedents
Appellant was charged under the following Information:
That on or about the 13th day of October 2003, in Quezon City,
Philippines, the said [appellant], conspiring and confederating
with other persons whose true names, identities and
whereabouts have not as yet been ascertained and mutually
helping one another, with intent to kill, qualified by evident
premeditation and treachery, taking advantage of superior
strength, did then and there willfully, unlawfully and
feloniously attack, assault and employ personal violence upon
the person of RODRIGO BORGONIA Y MONTESINES by then
and there shooting him with a gun, thereby inflicting upon him
serious and mortal wounds which were the direct and
immediate cause of his untimely death, to the damage and
prejudice of the heirs of said RODRIGO BORGONIA Y
MONTESINES.
CONTRARY TO LAW.[4]
When arraigned, appellant pleaded not guilty to the crime
charged.[5]
Version of the Prosecution
During the trial, the prosecution presented the testimonies of
the victim's widow, Milagros Borgonia; the Barangay Security
Development Office (BSDO) Executive Officer Lope Abendano
(BSDO Abendano); Editha Dictado (Dictado); PO3 Junie Verano
(PO3 Verano); and Dr. Paul Ed Ortiz (Dr. Ortiz).
The evidence of the prosecution as summarized by the CA is as
follows:
[The victim] was the chief of Barangay Pansol Proper, Quezon
City. On October 13,2003, at around 7:45 in the morning, [the
victim], BSDO Abendano, [the] Barangay Staff [and] x x x
Tanods, some street sweepers, some nuns, and others were
gathered in front of the barangay hall for the Monday morning
flag raising ceremony. After the flag rites, BSDO Abendano, who
was the emcee, called on [the victim] to deliver a speech. As [the
victim] was walking towards BSDO Abendano at the center of
the plaza, an unidentified person appeared, pointed a gun at
[the victim] and fired thrice. Another unidentified man was
shooting indiscriminately to disperse the crowd. The
malefactors retreated waving their guns.
When the smoke cleared, BSDO Abendano approached [the
victim] to check on his condition; when he felt no pulse, he
declared the victim dead. Minutes later, police men, SOCO, and
other city officials arrived.
BSDO Abendano, the widow of [the victim], and Dictado went to
Camp Karingal to execute a sworn statement about the
incident.
After around twenty (20) days, BSDO Abendano and Dictado
returned to Camp Karingal to pick out the gunman at a police
line-up; they both identified [appellant] as one of [the] gunmen.
Dr. Ortiz conducted an examination on the cadaver of the victim
and his findings were that the victim sustained three (3)
gunshot wounds – one with point of entry at the left orbital
region, the second at the right preauricural region and the third
at the left pectoral region; and concluded that the fatal wound
was the gunshot to the head.[6]
Version of Appellant
Appellant, on the other hand, denied the accusations against
him and interposed the defense of alibi. To corroborate his
testimony, appellant presented as witnesses his father, Bayani
Ascarraga; Allan Mamparair (Mamparair); and Damaso Tena
(Tena). According to the defense, on October 13, 2003, at
around 7 a.m., the appellant was with his father at their house
in Sitio Uma, Barangay Pagsangahan, Gen. Nakar, Quezon as
he was assigned to cook for the members of the Samahan ng
Katribo or Kabinsan.[7] On October 14, 2003, he and Mamparair
left the province of Quezon and arrived in Cubao in the evening
of the following day.[8] On October 16, 2003, Mamparair
accompanied appellant to a dentist.[9] The next day, they went to
Bulacan to harvest rice.[10] On October 21, 2003, while on their
way to Rodriguez, Rizal, they were arrested for violation of
Presidential Decree No. 1866 (illegal possession of firearms) and
were brought to Camp Karingal.[11] After posting bail, they were
allowed to go home but on October 30, 2003, they were again
invited to Kamp Karingal and made to stand in a police lineup.
[12]
Ruling of the Regional Trial Court
On March 16, 2009, the RTC of Quezon City, Branch 81,
rendered a Decision finding the appellant guilty of murder.
Thus–
WHEREFORE, the Court finds [appellant] SHERNIEL
UNGRIANO ASCARRAGA a.k.a SERGIO ONGRIANO
ASCARRAGA guilty beyond reasonable doubt of the crime of
MURDER described and penalized under Article 248 of the
Revised Penal Code as amended and is hereby sentenced to
suffer the penalty of Reclusion Perpetua with all the accessory
penalties provided by law and to indemnify the heirs of the late
Barangay Chairman Rodrigo Borgonia the amounts of
P75,000.00 as indemnity for his death, P75,000.00 as actual
damages and P50,000.00 as moral damages.
SO ORDERED.[13]
The RTC appreciated the qualifying circumstance of treachery to
have attended the commission of the crime. It pointed out that
the victim was shot while walking in the middle of the grounds
to make some announcements. The attack was sudden and
unexpected and the victim was totally unaware of the
impending harm to his life.[14]
Ruling of the Court of Appeals
Appellant elevated the case to the CA.
On January 27, 2015, the CA rendered the assailed Decision,
affirming the RTC Decision with modification, to wit:
WHEREFORE, premises considered, the Appeal is DENIED. The
Decision dated March 16, 2009, issued by the Regional Trial
Court, Branch 81, Quezon City, in Criminal Case No. Q-03-
122084 for Murder, is AFFIRMED with modification that
P30,000.00 as exemplary damages is also awarded, and all
awards shall earn interest at the legal rate of six percent (6%)
per annum from the date of finality of this judgment until fully
paid.
SO ORDERED.[15]
Hence, appellant filed the instant appeal.
On March 7, 2016, the Court required both parties to file their
respective supplementary briefs.[16] Appellant filed his
supplemental brief while the Office of Solicitor General opted
not to file one.
The Court's Ruling
In assailing his conviction, appellant puts in issue the
credibility of witness Dictado in identifying him as the assailant.
Appellant insists that witness Dictado could not have seen the
face of the assailant considering that she was crawling out of
the area and was wearing eyeglasses which had a prescription
grade of more than 200.[17] Appellant likewise questions the
procedure employed by the police officers in conducting the
police line-up.[18] Appellant claims that the procedure employed
was prone to suggestiveness as the witnesses were all in the
same room when they identified him in the line-up.[19] In
addition, appellant points out lack of motive on his part for
killing the victim.[20]
The Court is not persuaded.
The fact that witness Dictado was wearing eyeglasses with
prescription grade of more than 200 did not affect her positive
identification of appellant considering that she was only more or
less two arm's length away from the victim. Moreover, appellant
seems to forget that witness Dictado was not the only witness
who positively identified him as the assailant. Aside from
witness Dictado, the prosecution also presented as witness
BSDO Abendano who was the emcee during the flag ceremony.
He testified that he was only an arm's length or about a meter
away from the victim;[21] that he saw appellant approach and
point a gun at the victim;[22] and that the gun was fired at the
victim's forehead.[23]'Thus, the Court finds no reason to doubt
the positive identification of appellant by the prosecution's
witnesses who have no ill motive to testify falsely against him. It
bears stressing that ''the positive identification of the
[assailant], when categorical and consistent and without any [ill
motive] on the part of the eyewitnesses testifying on the matter,
prevails over alibi and denial."[24]
Appellant's attempt to discredit the police line-up must also fail.
In People v. Rivera,[25] the Court explained –
Even assuming arguendo that the appellant Alfonso Rivera's
out-of-court identification was tainted with irregularity, his
subsequent identification in court cured any flaw that may have
attended it. Without hesitation, the two prosecution witnesses,
Renato Losaria and Juanita Baylon identified the appellant as
one of the assailants. In People v. Timon, the accused were
identified through a show-up. The accused assailed the process
of identification because no other suspect was presented in a
police line-up. We ruled that a police line-up is not essential in
identification and upheld the identification of the accused
through a show-up. We also held that even
assuming arguendo that the out-of-court identification was
defective, the defect was cured by the subsequent positive
identification in court for the 'inadmissibility of a police line-up
identification x x x should not necessarily foreclose the
admissibility of an independent in-court identification.'
In this case, the prosecution's eyewitnesses, witness BSDO
Abendano and witness Dictado, both positively identified
appellant as the assailant in open court.[26]
Appellant's lack of motive for killing the victim likewise has no
bearing as jurisprudence consistently holds that "[m]otive is
generally x x x immaterial because it is not an element of the
crime [of murder]."[27]
All told, the Court finds appellant guilty beyond reasonable
doubt of murder. Both the trial court and the CA properly
sentenced him to suffer the penalty of reclusion perpetua. The
award of P75,000.00 as civil indemnity was also proper. The
same is true with the award of actual damages in the amount of
P75,000.00 which was duly supported by a receipt.[28] The CA
also correctly imposed legal interest at the rate of 6% per
annum on all damages awarded from the date of finality of
judgment until fully paid.[29]
However, in order to conform to prevailing jurisprudence, the
amounts of moral damages and exemplary damages should be
increased to P75,000.00 each.[30]
WHEREFORE, premises considered, the appeal is DISMISSED.
The January 27, 2015 Decision of the Court of Appeals, finding
appellant Sherniel Ungriano Ascarraga a.k.a. Sergio Ongriano
Ascarraga guilty beyond reasonable doubt of the crime of
murder is AFFIRMED with MODIFICATION that the amounts
of moral damages should be increased to P75,000.00 each.
SO ORDERED.
Leonardo-De Castro (Acting Chairperson),  [*] Martires,[**] Tijam,
and Gesmundo,[***] JJ., concur. 
[*]
 Per Special Order No. 2559 dated May 11, 2018.
 Per November 29, 2017 raffle vice J. Jardeleza who recused
[**]
due to prior action as Solicitor General.
[***] 
Per Special Order No. 2560 dated May 11, 2018.
[1]
 Manalili v. Court of Appeals, 345 Phil. 632, 649 (1997).
  Rollo, pp. 2-14; penned by Associate Justice Victoria Isabel A.
[2] [17]
 Id. at 27-30.
Paredes and concurred in by Associate Justices Magdangal M.
De Leon and Jane Aurora C. Lantion. [18]
 Id. at 30-32.

 CA rollo, pp. 118-127; penned by Presiding Judge Ma.

[3] [19]
 Id.
Theresa L. De La Torre-Yadao.
[20]
 Id. at 32-33.
[4]
 Records, p. 1.
 TSN, May 26, 2004, Direct Examination of Witness BSDO
[21]
[5]
 Rollo, p. 4. Lope Abendano, p. 7.
[6]
 Id. at 4-5. [22]
 Id. at 6-7.
[7]
 Id. at 5. [23]
 Id. at 8.
[8]
 Id. at 5-6. [24]
 People v. Berdin, 462 Phil. 290, 304 (2003).
[9]
 CA rollo, pp. 122-123. [25]
 458 Phil. 856, 876-877.
[10]
 Id.  TSN, May 26, 2004, Direct Examination of witness BSDO
[26]

Lope Abendano, pp. 17-18; and TSN, July 12, 2004, Direct
[11]
 Id. at 101. Examination of witness Editha Dictado, pp. 4-5.

[12]
 Id. at 101-102. [27]
 People v. Babor, 772 Phil. 252, 264 (2015).

[13]
 Id. at 127. [28]
 Records, p. 228.

[14]
 Id. at 126. [29]
 People v. Jugueta, 783 Phil. 806, 854, 856 (2016).

[15]
 Rollo, p. 13. [30]
 Id. at 848.

[16]
 Id. at 21-22.

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THIRD DIVISION
[ G.R. No. 234499, June 06, 2018 ]
RUDY L. RACPAN, PETITIONER, VS. SHARON BARROGA-
HAIGH, RESPONDENT.
D E C I S I O N
VELASCO JR., J.: 
Nature of the Case
This treats of the Petition for Review on Certiorari under Rule 45
of the Rules of Court, assailing the February 13,
2017 Decision[1] and August 17, 2017 Resolution[2] of the Court
of Appeals (CA) in CA G.R. CV No. 04034-MIN. Said rulings
affirmed the dismissal of the petitioner's complaint for improper
venue and failure to comply with a condition precedent to its
filing.
Factual Antecedents
Petitioner Rudy Racpan filed a Complaint "For Declaration For
Nullity of Deed of Sale with Right to Repurchase & Attorney's
Fees"[3] before the Regional Trial Court of Davao City, Branch 11
(RTC-Davao). In his Complaint, which was docketed as Civil
Case No. 34, 742-2012, petitioner alleged that after his wife's
death on November 12, 2011, he instructed their daughter to
arrange his wife's important documents. In so doing, their
daughter discovered a Deed of Sale with Right to Purchase dated
March 29, 2011. The Deed of Sale was purportedly signed by
him and his late wife and appeared to convey to respondent
Sharon Barroga-Haigh a real property registered in his name
under TCT No. T-142-2011009374 and located in Bo. Tuganay,
Municipality of Carmen, Province of Davao del Norte.
[4]
 Petitioner maintained that the Deed of Sale was falsified and
fictitious as he never signed any contract, not even any special
power of attorney, for the sale or conveyance of the property
which is still in his possession. Thus, he prayed for the
declaration of the Deed of Sale's nullity.
In her Answer with Compulsory Counterclaim,[5] respondent
contended, by way of affirmative defense, that the venue of the
Complaint was improperly laid and that the filing of the case
lacks the mandatory requirement of Barangay Clearance.
Subsequently, respondent filed a motion for preliminary hearing
on her affirmative defenses.
Acting on the motion, the RTC-Davao set the case for
preliminary hearing and thereafter issued an Order dated
September 18, 2013[6]dismissing the petitioner's Complaint as
follows:
WHEREFORE, in view of the foregoing, the present case is
hereby ORDERED DISMISSED for being improperly filed before
the Regional Trial Court of Davao City and for failure to comply
with a condition precedent prior to its filing.
SO ORDERED. [7]
Petitioner moved for the RTC-Davao to reconsider[8] its Order
dismissing the complaint but the trial court remained steadfast
and denied his motion in its June 19, 2004 Order.[9] Hence, the
petitioner came to the CA on appeal.[10]
Ruling of the Court of Appeals
As stated at the outset hereof, the appellate court affirmed the
dismissal of the petitioner's Complaint as follows:
WHEREFORE, the order dated September 18, 2013 of the
Regional Trial Court, Branch 11, Davao City in Civil Case No.
34,742-12 is AFFIRMED.
SO ORDERED.[11]
The CA explained that petitioner's Complaint is a real action as
it wants the court to abrogate and nullify. whatever right or
claim the respondent might have on the property subject of the
Deed of Sale. Hence, for the appellate court, Section 1, Rule 4 of
the Rules of Court is applicable. Under this Rule, real actions
shall be commenced and tried in the proper court which has
jurisdiction over the area wherein the real property involved is
situated. As the property involved is located in Bo. Tuganay,
Municipality of Cannen, Province of Davao del Norte, the
appellate court held that the Complaint should have been
lodged with the RTC of Davao del Norte and not the RTC-Davao.
Further, the CA found that the petitioner's prayer for the
issuance of a writ of preliminary injunction is a mere ploy to
avoid the requirement of a barangay conciliation, as a mere
annotation of a notice of lis pendens would achieve the same
effect without having to undergo trial or post a bond.
In a Resolution dated August 17, 2017[12] the CA stood its
ground by denying the petitioner's Motion for Reconsideration.
[13]
Hence, the petitioner's present recourse, it being his contention
that the Complaint he interposed with the RTC-Davao is a
personal action. He maintains that his Complaint is not
concerned with title to or possession of real property, as in fact,
no transfer of possession or title of the real property to the
respondent has occurred.[14] For the petitioner, the Complaint's
venue was properly laid in Davao City where both he and the
respondent reside.
Petitioner likewise reiterated that, as his Complaint was coupled
with a prayer for the issuance of a writ of preliminary
injunction, it is exempt from barangay conciliation proceedings.
Issue
The main and decisive issue for resolution is whether the CA
erred in affirming the dismissal of the petitioner's Complaint.
Our Ruling
The petition is impressed with merit.
The venue was properly laid as the complaint was a
personal action.
By weight of jurisprudence, the nature of an action is
determined by the allegations in the complaint. In turn, the
nature of the action determines its proper venue. Rule 4 of the
Rules of Court provides the rules on the situs for bringing real
and personal actions, viz:
 Rule 4
VENUE OF ACTIONS
Section 1. Venue of real actions. - Actions affecting title to or
possession of real property, or interest therein, shall be
commenced and tried in the proper court which has jurisdiction
over the area wherein the real property involved, or a portion
thereof, is situated.
Forcible entry and detainer actions shall be commenced and
tried in the municipal trial court of the municipality or city
wherein the real property involved, or a portion thereof, is
situated.
Section 2. Venue of personal actions. - All other actions may be
commenced and tried where the plaintiff or any of the principal
plaintiffs resides, or where the defendant or any of the principal
defendants resides, or in the case of a non-resident defendant
where he may be found, at the election of the plaintiff.
Expounding on the foregoing provisions, the Court delineated
the basic distinction between a real and a personal action and
their respective venues in Bank of the Philippine Islands v.
Hontanosas, Jr.,[15] stating that:
The determinants of whether an action is of a real or a personal
nature have been fixed by the Rules of Court and relevant
jurisprudence. According to Section 1, Rule 4 of the Rules of
Court, a real action is one that affects title to or possession of
real property, or an interest therein. Such action is to be
commenced and tried in the proper court having jurisdiction
over the area wherein the real property involved, or a portion
thereof, is situated, which explains why the action is also
referred to as a local action. In contrast, the Rules of
Court declares all other actions as personal actions. Such
actions may include those brought for the recovery of personal
property, or for the enforcement of some contract or recovery of
damages for its breach, or for the recovery of damages for the
commission of an injury to the person or property. The venue of
a personal action is the place where the plaintiff or any of the
principal plaintiffs resides, or where the defendant or any of the
principal defendants resides, or in the case of a non-resident
defendant where he may be found, at the election of the
plaintiff, for which reason the action is considered a transitory
one.
Otherwise stated, what determines the venue of a case is the
primary objective for the filing of the case.[16] On one hand, if the
plaintiff seeks the recovery of personal property, the
enforcement of a contract or the recovery of damages, his
complaint is a personal action that may be filed in the place of
residence of either party. On the other hand, if the plaintiff
seeks the recovery of real property, or if the action affects title to
real property or for the recovery of possession, or for partition or
condemnation of, or foreclosure of mortgage on, real property,
then the complaint is a real action that must be brought before
the court where the real property is located. Thus, in Chua v.
Total Office Products and Services, Inc.,[17] this Court ruled that
where the action is not intended for the recovery of real property
but solely for the annulment of a contract, it is a personal
action that may be filed in the court where the plaintiff or the
respondent resides. It held:
Well-settled is the rule that an action to annul a contract of
loan and its accessory real estate mortgage is a personal action.
In a personal action, the plaintiff seeks the recovery of personal
property, the enforcement of a contract or the recovery of
damages. In contrast, in a real action, the plaintiff seeks the
recovery of real property, or, as indicated in Section 2 (a), Rule 4
of the then Rules of Court, a real action is an action affecting
title to real property or for the recovery of possession, or for
partition, or condemnation of, or foreclosure of mortgage on, real
property.
In the Pascual case, relied upon by petitioner, the contract of
sale of the fishpond was assailed as fictitious for lack of
consideration. We held that there being no contract to begin
with, there is nothing to annul. Hence, we deemed the action for
annulment of the said fictitious contract therein as one
constituting a real action for the recovery of the fishpond
subject thereof
We cannot, however, apply the foregoing doctrine to the instant
case. Note that in Pascual, title to and possession of the subject
fishpond had already passed to the vendee. There was,
therefore, a need to recover the said fishpond. But in the
instant case, ownership of the parcels of land subject of the
questioned real estate mortgage was never transferred to
petitioner, but remained with TOPROS. Thus, no real action
for the recovery of real property is involved. This being the
case, TOPROS' action for annulment of the contracts of
loan and real estate mortgage remains a personal action.
(emphasis supplied)
In the Complaint filed with the court a quo, petitioner sought
the nullification of the Deed of Sale with Right to Repurchase on
the strength of this claim: he did not sign the same nor did he
execute any special power of attorney in favor of his late wife to
do so in his behalf.[18] But, as there was no allegation that the
possession and title to the property have been transferred
to respondent, nowhere in the Complaint did petitioner
allege or pray for the recovery or reconveyance of the real
property. Pertinent parts of the Complaint read thus:
4. Plaintiff was married to Ma. Lucila B. Racpan on 20
December 1978. The latter died on 13 November 2011 at
Oroville, California...
5. Plaintiff Racpan purchased a property from his brother
Lorezo L. Racpan formerly covered by Transfer Certificate of
Title No. T-189893 and located at Carmen, Davao del Norte and
the said property is now covered by Transfer Certificate of
Title No. T-142-2011009374. Hereto attached and marked as
Annex "B" is a copy of the Transfer Certificate of Title No. T-
142-2011009374 registered under the name of plaintiff
Rudy L. Racpan. Also attached and marked as Annex "C'" is
the tax declaration of the subject property to prove that plaintiff
is the owner of the same.
6. Plaintiff's wife died at Oroville, California on 12 November
2011. However, her remains were returned to Davao City,
Philippines. Nonetheless, it was the daughter of the plaintiff in
the person of Lani Racpan who arrived first in Davao City.
xxxx
8. On 12 December 2011, plaintiff's daughter showed to him
the subject deed of sale with right to repurchase dated 29
March 2011. Plaintiff was surprised because he did not know or
has NO knowledge of the said deed of sale with right to
repurchase. When plaintiff navigated the Deed of Sale, he
was surprised because his signature appearing on the same
is COMPLETELY FALSIFIED....
8.a Moreover, plaintiff did not also execute any special
power of attorney in favour of his deceased wife authoring
the latter to [sell] the subject property to the defendant.
8.b On the other hand, the subject property is registered
under the name of plaintiff Rudy Racpan and NOT TO
SPOUSES Racpan. The words "married to Ma. Lucila B.
Racpan" only signified the civil status of plaintiff to the latter.
xxxx
9.d Evidently, from the foregoing the (alleged) subject deed of
sale with right to repurchase is NULL AND VOID as the same
contains the falsified signature of the herein plaintiff.
xxxx
11. Plaintiff before and during the time of the execution of the
subject Deed of Sale with Right to Repurchase dated 29 March
2011 NEVER MET defendant Saigh. It was only sometime in
December 7 or 8, 2011 that he met defendant Saigh during the
wake of his wife wherein he was introduced to the former by
Orly Gabriel.
12. To date, plaintiff is in possession of the subject property.
However, his daughter has been receiving text message from
defendant requiring him to settle the said alleged obligation of
his deceased wife to her.[19]
Evidently, as the Complaint was not concerned with the title to
or recovery of the real property, it was a personal action.
Thus, Davao City, where both the petitioner and the respondent
reside is the proper venue for the complaint. The appellate court
therefore committed a reversible error in affirming the trial
court's dismissal of the case for improper venue.
The Complaint was exempted from Barangay Conciliation
Proceedings
As for petitioner's failure to resort to barangay conciliation,
Section 412 of the Local Government Code (LGC) provides that
parties may go directly to court where the action is coupled with
provisional remedies:
SEC. 412. Conciliation. - (a) Pre-condition to filing of complaint
in court. - No complaint, petition, action, or proceeding involving
any matter within the authority of the lupon shall be filed or
instituted directly in court or any other government office for
adjudication, unless there has been a confrontation between the
parties before the lupon chairman or the pangkat, and that no
conciliation or settlement has been reached as certified by the
lupon secretary or pangkat secretary as attested to by the lupon
chairman or pangkat chairman or unless the settlement has
been repudiated by the parties thereto.
(b) Where parties may go directly to court. - The parties may go
directly to court in the following instances:
(1) Where the accused is under detention;
(2) Where a person has otherwise been deprived of personal
liberty calling for habeas corpus proceedings;
(3) Where actions are coupled with provisional remedies
such as preliminary injunction, attachment, delivery of
personal property, and support pendente lite; and
(4) Where the action may otherwise be barred by the statute of
limitations.
(c) Conciliation among members of indigenous cultural
communities. - The customs and traditions of indigenous
cultural communities shall be applied in settling disputes
between members of the cultural communities.
While there is no dispute herein that the present case was never
referred to the Barangay Lupon for conciliation before petitioner
instituted Civil Case No. 34, 742-2012, there is likewise no
quibbling that his Complaint was coupled with a prayer for the
issuance of a preliminary injunction.[20] Hence, it falls among
the exceptions to the rule requiring the referral to baranggay
conciliation.
As good faith is always presumed,[21] in the absence of proof of
improper motive on the part of the petitioner, the Court cannot
countenance the appellate court's assumption that petitioner
was solely intent on evading the requirements of the LGC in
applying for a preliminary injunction. This Court cannot sustain
a dismissal of an action on account of an unproven assertion of
bad faith.
 of Court
WHEREFORE, the petition is GRANTED. The February 13,
2017 Decision and August 17, 2017 Resolution of the Court of
Appeals in CA-G.R. CV No. 04034-MIN, as well as  Penned by Associate Justice Oscar V. Badelles and concurred
[1]

the Orders dated September 18, 2013 and June 19, 2004 of the in by Associate Justices Romulo V. Borja and Ronaldo B.
Regional Trial Court of Davao City, Branch 11, in Civil Case No. Martin, rollo, pp. 48-53.
34, 742-2012 are REVERSED and SET ASIDE. Civil Case No.
34, 742-2012 is hereby ordered REINSTATED. The RTC is [2]
 Id. at 55-56.
ordered to proceed with dispatch in the disposition of the
mentioned case. [3]
 Id. at 74-85.

SO ORDERED. [4]
 Id. at 88.

Bersamin, Leonen, Martires, and Gesmundo, JJ., concur. [5]

 Id. at 104-110.
[6]
 Id. at 116-117.

July 2, 2018  Id. at 85, 117. Penned by Presiding Judge Virginia Hofileña
[7]

Europa.
NOTICE OF JUDGMENT
[8]
 Id. at 118-128.
Sirs / Mesdames:
[9]
 Id. at 129.
Please take notice that on June 6, 2018 a Decision, copy [10]
 Id. at 130-131.
attached hereto, was rendered by the Supreme Court in the
above-entitled case, the original of which was received by this [11]
 Id. at 53.
Office on July 2, 2018 at 1:38 p.m.
[12]
 Id. at 55-56.
Very truly
yours, [13]
 Id. at 58-72.

(SGD) [14]
 Id. at 29-30.
WILFREDO V.
LAPITAN [15]
 737 Phil. 38 (2014).
  Division Clerk
  Latorre v. Latorre, 631 Phil. 88 (2010); citing Gochan v.
[16]
This is a petition for review on certiorari[1] assailing the
Gochan, 423 Phil. 491, 501 (2001) and Olympic Mines and Decision[2] dated 29 September 2014 and the Resolution[3] dated
Development Corp. v. Platinum Group Metals Corporation, G.R. 6 August 2015 of the Court of Appeals (CA) in CA-G.R. SP No.
Nos. 178188, 180674, 181141 & 183527, May 8, 2009; Golden 116322. The CA affirmed the Decision[4] dated 11 December
Arches Development Corp. v. St. Francis Square Holdings, Inc., 2009 of the Regional Trial Court of Urdaneta City, Pangasinan,
655 Phil. 221 (2011). Branch 45 (RTC), which set aside the decision of the
7th Municipal Circuit Trial Court of Asingan-San Manuel,
 508 Phil. 490 (2005); also cited in Bank of the Philippine
[17]
Asingan, Pangasinan (MCTC) and dismissed petitioners'
Islands v. Hontanosas, Jr., supra note 15. complaint for unlawful detainer.
[18]
 Rollo, p. 76. The Facts
[19]
 Id. at 75-80; emphasis supplied. On 24 November 1993, petitioner Teresita Bugayong-Santiago
(Teresita) and her husband Edgardo Santiago (Edgardo),
[20]
 Id. at 83 84. through a Deed of Absolute Sale, bought a 169 square meter
commercial land with a building structure located in Poblacion,
 Escritor, Jr. v. Intermediate Appellate Court, 239 Phil. 563
[21]
Asingan, Pangasinan. The land was originally owned by
(1987). Teresita's parents, the late spouses Francisco Bugayong and
Segundina Ventura-Bugayong, and covered by Transfer
Certificate of Title (TCT) No. 37637, which was issued to the late
spouses on 9 November 1961.
SECOND DIVISION
On 23 May 2007, Edgardo died. He was survived by Teresita
[ G.R. No. 220389, December 06, 2017 ] and their children, petitioners Earl Eugene, Edward, and
Edgardo, Jr. The children inherited one-half of the land.
TERESITA BUGAYONG-SANTIAGO, EARL EUGENE
SANTIAGO, EDWARD SANTIAGO, AND EDGARDO In 2008, petitioners sent a letter dated 15 February 2008 to
SANTIAGO, JR., PETITIONERS, V. TEOFILO BUGAYONG, respondent Teofilo Bugayong (Teofilo), Teresita's brother,
RESPONDENT. demanding him to vacate the subject property within 15 days
from receipt of the letter and to pay the amount of P3,000
DECISION monthly. Respondent received the letter on 20 February 2008
but refused to vacate the property.

CARPIO, J.:  Thus, petitioners filed a Complaint[5] for Unlawful Detainer

dated 15 March 2008 with the MCTC. Petitioners alleged that
since 2002, they have been tolerating the stay and occupation
of Teofilo over the two-third (2/3) eastern portion of the land
and a part of the commercial building without paying any lease
rental. Petitioners added that Teofilo had been harassing
Teresita whenever she went to Asingan, Pangasinan and that on
3 June 2006, Teofilo slapped and pulled her hair which caused
some injuries. Thus, she filed a criminal case for physical
injuries against him. Also, before they executed the complaint,
petitioners exerted serious efforts to settle the case amicably
but to no avail.
In his Answer with Counterclaim, Teofilo alleged that his
parents, Francisco Bugayong and Segundina Ventura-
Bugayong, were the absolute and registered owners of the
subject parcel of land covered by TCT No. 37637 where a
commercial building had been erected. Prior to their death, the
late spouses executed a Deed of Quitclaim dated 21 December
1995 in favor of all their six children, namely: Antonio, Teofilo,
Erlinda, Teresita, Francisco, Jr., and Estrellita Bugayong-
Cachola (Cachola). Teofilo stated that when he was about to
register the quitclaim with the Register of Deeds after paying
the necessary taxes, petitioners caused the annotation on the
title of the Deed of Absolute Sale by way of Adverse Claim on 4
March 2004. Teofilo also claimed that during the lifetime of his
parents, they reported the Owner's Duplicate Copy of TCT No.
37637 as lost and they executed an Affidavit of Loss on 16
November 1995 and had it annotated at the back of the title.
Consequently, a Second Owner's Duplicate Copy was granted
by the RTC in lieu of the lost title. Teofilo maintained that while
the petitioners claimed that they purchased the subject
property in 1993, he had been paying the realty taxes of the
subject property for the benefit of the estate of his deceased
parents and all the heirs, including the northwestern portion of
the building occupied by Cachola, the sister of both Teofilo and
Teresita. Further, Teofilo contended that he had been in actual
possession and enjoyment of the subject property long before
the execution of the assailed Deed of Absolute Sale between his
parents and Teresita and Edgardo.
In a Decision[6] dated 29 September 2008, the MCTC ordered
Teofilo to vacate the property. The MCTC resolved the question
of ownership in order to resolve the issue of possession. The
MCTC reasoned that the Deed of Absolute Sale dated 24
November 1993 should be given effect and validity since it was
executed before the Deed of Quitclaim was executed on 21
December 1995 and had been annotated at the back of TCT No.
37637. Also, the MCTC considered Teofilo's occupation over the
subject property as mere tolerance and demanded that Teofilo
vacate the property. The dispositive portion of the Decision
states:
WHEREFORE, premises considered, judgment is hereby
rendered as follows:
1. Ordering defendant or anyone acting in his behalf to
vacate the two third (2/3) eastern portion of the subject
premises;
2. Ordering defendant to surrender possession of the
subject premises to the plaintiff[s];
3. Ordering the dismissal of the counter-claim;
4. Ordering defendant to pay reasonable lease rental of the
subject premises the amount of P3,000 monthly starting
from February 20, 2008 until he vacates and
surrender[s] possession to the plaintiffs and to pay
P15,000.00 as attorney's fees and to pay the costs of
this suit.
SO ORDERED.[7]
Teofilo filed an appeal[8] with the RTC. Teofilo averred that
petitioners had failed to establish a cause of action for unlawful
detainer against him such that the MCTC had no jurisdiction
over the complaint.
In a Decision[9] dated 11 December 2009, the RTC reversed the
decision of the MCTC. The RTC stated that tolerance must be
present right from the start of possession to bring the action
within the ambit of unlawful detainer. In this case, there was
forcible entry at the beginning and tolerance thereafter; thus,
there can be no basis for the action for unlawful detainer.
The RTC declared that the remedy of the petitioners was
either accion publiciana or accion reivindicatoria. The
dispositive portion of the Decision states:
WHEREFORE, premises considered, the decision appealed from
is set aside. Accordingly, the complaint is dismissed.
SO ORDERED.[10]
Petitioners filed a motion for reconsideration. The RTC, in an
Order dated 7 September 2010, denied the motion.
On 29 October 2010, petitioners filed a petition for
review[11] with the CA. In a Decision dated 29 September 2014,
the CA denied the petition for lack of merit
Petitioners then filed a motion for reconsideration dated 24
October 2014 which the CA denied in a Resolution[12] dated 6
August 2015.
Hence, the instant petition.
The Issue
Whether or not the CA erred in affirming the decision of the
RTC which dismissed the unlawful detainer case against
respondent.
The Court's Ruling
The petition lacks merit.
Petitioners contend that from the start, they have tolerated and
have been tolerating the stay and occupation of respondent over
two-third (2/3) portion of the commercial lot and the building
situated thereon. Petitioners explain that when they bought the
land, it has been agreed upon between Teresita and her
husband Edgardo, that Teresita's parents would stay on the
land until their death. Teresita's mother passed away on 11
February 1997 and her father on 26 November 1999.
Afterwards, Teresita allowed her sister, Cachola, to occupy the
subject property located in Asingan, Pangasinan since
petitioners have been residing in San Fernando, Pampanga
since 1974. Petitioners allege that sometime in 2002, Teofilo, in
the presence of Cachola, just entered the prope1ty without their
knowledge and consent and had been occupying two-third (2/3)
portion of the property without paying any lease rental. Since
petitioners wanted to take possession of the subject property,
they sent a demand letter for Teofilo to vacate the premises.
Respondent, on the other hand, maintains that he had been in
actual possession and enjoyment of the subject property, being
one of the forced heirs of the registered owners, his parents.
Respondent contends that the MCTC did not acquire
jurisdiction over the complaint since the complaint failed to aver
facts constitutive of forcible entry or unlawful detainer - how
entry was affected or how and when dispossession started.
Thus, the complaint or case filed should not have been for
unlawful detainer with the MCTC but one for accion
publiciana or accion reivindicatoria in the proper RTC.
Ejectment or accion interdictal takes on two forms: forcible entry
and unlawful detainer. The remedies for forcible entry and
unlawful detainer are laid down in Section 1, Rule 70 of the
Rules of Court, which states:
Section 1. Who may institute proceedings, and when. - Subject
to the provisions of the next succeeding section, a person
deprived of the possession of any land or building by force,
intimidation, threat, strategy, or stealth, or a lessor, vendor,
vendee, or other person against whom the possession of any
land or building is unlawfully withheld after the expiration or
termination of the right to hold possession, by virtue of any
contract, express or implied, or the legal representatives or
assigns of any such lessor, vendor, vendee, or other person,
may, at any time within one (1) year after such unlawful
deprivation or withholding of possession, bring an action in the
proper Municipal Trial Court against the person or persons
unlawfully withholding or depriving of possession, or any
person or persons claiming under them, for the restitution of
such possession, together with damages and costs.
In Sarmiento v. Court of Appeals,[13] the distinction between
forcible entry and unlawful detainer had been clearly explained:
Forcible entry and unlawful detainer cases are two distinct
actions defined in Section 1, Rule 70 of the Rules of Court. In
forcible entry, one is deprived of physical possession of land or
building by means of force, intimidation, threat, strategy, or
stealth. In unlawful detainer, one unlawfully withholds
possession thereof after the expiration or termination of his
right to hold possession under any contract, express or implied.
In forcible entry, the possession is illegal from the beginning
and the basic inquiry centers on who has the prior
possession  de facto. In unlawful detainer, the possession was
originally lawful but became unlawful by the expiration or
termination of the right to possess, hence the issue of rightful
possession is decisive for, in such action, the defendant is in
actual possession and the plaintiffs cause of action is the
termination of the defendant's right to continue in possession.
What determines the cause of action is the nature of
defendant's entry into the land. If the entry is illegal, then the
action which may be filed against the intruder within one (1)
year therefrom is forcible entry. If, on the other hand, the entry
is legal but the possession thereafter became illegal, the case is
one of unlawful detainer which must be filed within one (1) year
from the date of the last demand. (Emphasis supplied)
In the present case, petitioners filed an unlawful detainer case
against respondent before the MCTC. Petitioner Teresita alleges
that she and her husband Edgardo bought the subject property
from her parents on 4 November 1993. Since her family stays in
San Fernando, Pampanga she allowed her sister Cachola to live
in the property. However, sometime in 2002, without Teresita's
knowledge and consent, respondent Teofilo entered the property
and occupied the two-third (2/3) eastern portion of the same.
Teresita maintains that she had been merely tolerating Teofilo's
stay and occupation in that part of the property. In 2008, when
petitioners were ready to make use of the property, they
demanded that Teofilo vacate the premises but he refused.
In Manila Electric Company v. Heirs of Spouses Deloy,[14] we held
that the only issue to be resolved in an unlawful detainer case
is physical or material possession of the property, independent
of any claim of ownership by any of the parties involved.
However, as emphasized in the Sarmiento[15] case above, what
determines the cause of action in ejectment cases is the nature
of defendant's entry into the land.
Petitioners insist that Teofilo entered the property without their
knowledge and consent. Meaning, Teofilo's entry into the
property had been illegal from the beginning. Later on, when
they found out that he occupied the subject property,
petitioners merely tolerated his stay there.
The Rules are clear that if the entry into the property is illegal,
the action which may be filed against the intruder is forcible
entry and this action must be brought within one (1) year from
the illegal entry. But if the entry is originally legal then became
illegal due to the expiration or termination of the right to
possess, an unlawful detainer case may be brought within one
(1) year from the date of the last demand. This action will only
prosper in a case where the plaintiff allows the defendant to use
the property by tolerance without any contract, and the
defendant is necessarily bound by an implied promise that he
will vacate on demand.
However, based on the record, petitioners claimed that
respondent entered the property "without their knowledge and
consent"[16] on one hand, and by mere "tolerance"[17] on the
other. It can be concluded then that respondent occupied the
subject property without petitioners' knowledge and consent
and thereafter petitioners tolerated respondent's stay in the
property for many years. Thus, there was illegal entry into the
property at the start.
As correctly observed by the RTC, since here was forcible entry
at the beginning and tolerance thereafter, an action for unlawful
detainer cannot prosper since a requisite for an action for
unlawful detainer is that the possession was originally lawful,
but turned unlawful only upon the expiration of the right to
possess. In Spouses Valdez v. Court of Appeals,[18] we held that
to justify an action for unlawful detainer, it is essential that the
plaintiff’s supposed act of tolerance must have been present
right from the start of the possession which is later sought to be
recovered. Otherwise, if the possession was unlawful at the
start, an action for unlawful detainer would be an improper
remedy.
The complaint was not clear on how entry into the subject
property was effected and how or when dispossession started.
The complaint merely states that "since 2002, plaintiff Teresita
B. Santiago and her late husband have been tolerating the stay
and occupation of the defendant, brother of plaintiff Teresita B.
Santiago, over the two-third (2/3) eastern portion of the lot and
portion of the commercial house thereon, without paying [any]
lease rental." [19] However, in succeeding pleadings, petitioners
insisted that respondent entered the property without their
knowledge and consent. Also, no contract, whether express or
implied, existed between the parties and there were no other
details submitted or evidence presented by petitioners to show
how respondent exactly entered the property and when
petitioners were dispossessed of such. As similarly held in the
case of Zacarias v. Anacay:[20]
In the instant case, the allegations in the complaint do not
contain any averment of fact that would substantiate
petitioners' claim that they permitted or tolerated the
occupation of the property by respondents. The complaint
contains only bare allegations that "respondents without any
color of title whatsoever occupie[d] the land in question by
building their house [o]n the said land thereby depriving
petitioners the possession thereof." Nothing has been said on
how respondents' entry was effected or how and when
dispossession started. Admittedly, no express contract existed
between the parties. This failure of petitioners to allege the key
jurisdictional facts constitutive of unlawful detainer is fatal.
Since the complaint did not satisfy the jurisdictional
requirement of a valid cause for unlawful detainer, the
municipal trial court had no jurisdiction over the case. It is in
this light that this Court finds that the Court of Appeals
correctly found that the municipal trial court had no
jurisdiction over the complaint.[21]
We have ruled in Rosario v. Alba[22] that jurisdiction in ejectment  Rollo, pp. 136-142. Penned by Associate Justice Edwin D.
[2]

cases is determined by the allegations of the complaint and the Sorongon, with Associate Justices Rosmari D. Carandang and
character of the relief sought. The complaint should embody Marlene Gonzales-Sison concurring.
such statement of facts as to bring the case clearly within the
class of cases under Section 1, Rule 70 of the Rules of Court, as [3]
 Id. at 153-154.
these proceedings are summary in nature. Thus, since the
complaint fell short of the jurisdictional facts to vest the court [4]
 Id. at 107-112. Penned by Judge Emma P. Bauzon.
jurisdiction to effect the ejectment of respondent, the MCTC had
no jurisdiction to take cognizance of petitioners' complaint and
 Docketed as Civil Case No. A-1138. Captioned "Complaint for
[5]
both the RTC and the CA correctly dismissed the unlawful
Illegal Detainer."
detainer case against respondent.
[6]
 Rollo, pp. 76-80.
However, on a final note, this ruling is limited only to the
determination of whether the complaint for unlawful detainer
was properly filed and whether the MCTC had jurisdiction over
[7]
 Id. at 80.
the case. This adjudication is not a final determination of the
issue of possession or ownership and thus, will not bar any [8]
 Docketed as Civil Case No. U-9254.
party from filing a case in the proper RTC for (1) accion
publiciana, where the owner of the property who was [9]
 Rollo, pp. 107-112.
dispossessed failed to bring an action for ejectment within one
(1) year from dispossession, or (2) accion reivindicatoria alleging [10]
 Id. at 112.
ownership of the property and seeking recovery of its full
possession. [11]
 Docketed as CA-G.R. SP No. 116322.
WHEREFORE, we DENY the petition. We AFFIRM the Decision [12]
 Rollo, pp. 153-154.
dated 29 September 2014 and the Resolution dated 6 August
2015 of the Court of Appeals in CA-G.R. SP No. 116322. [13]
 320 Phil. 146, 153-154 (1995).
SO ORDERED. [14]
 710 Phil. 427, 436 (2013).
Peralta, Perlas-Bernabe, Caguioa, and Reyes, Jr., JJ., concur.  [15]
 Supra note 13.

[1]
 Under Rule 45 of the 1997 Revised Rules of Civil Procedure.  See CA Decision dated 29 September 2014 stating that the
[16]

records, petitioners' motion for reconsideration before the RTC

and petition for review with the CA all indicated that petitioners
made allegations that respondent entered the subject property
without their knowledge and consent. Rollo, p. 140. LEONEN, J.: 

 In the Complaint for Unlawful Detainer filed by petitioners, it

[17]
The marking and identification of the seized dangerous drug is
states that "since 2002, plaintiff Teresita B. Santiago and her an essential part of the chain of custody. Absent this step, a gap
late husband have been tolerating the stay and occupation of is created which casts a shadow of doubt on the identity and
the defendant, brother of plaintiff Teresita B. Santiago, over the integrity of the dangerous drug presented as evidence, creating
two-third (2/3) eastern portion of the lot and portion of the reasonable doubt, which must be resolved in favor of the
commercial house thereon, without paying [any] lease rental." accused.
(Id. at 26-27)
This reviews the August 30, 2012 Decision[1] of the Court of
[18]
 523 Phil. 39, 47 (2006). Appeals in CA-G.R. No. CEB-CR HC No. 01081, affirming the
conviction of accused-appellant Siegfred Cabellon y Cabañero
[19]
 Rollo, pp. 26-27. (Cabellon) for violation of Section 5 of Republic Act No. 9165,
otherwise known as the Comprehensive Dangerous Drugs Act of
2002.
[20]
 744 Phil. 201 (2014).
This Court restates the facts as found by the lower courts.
[21]
 Id. at 213.
In an Information[2] dated April 28, 2006, Cabellon was charged
[22]
 G.R. No. 199464, 18 April 2016, 789 SCRA 630, 637. with violation of Section 5 of Republic Act No. 9165:
That on or about the 13th day of April2006 at about 7:30 P.M.
more or less, in Bulacao, City of Talisay, Cebu, Philippines, and
within the jurisdiction of this Honorable Court, the said
818 Phil. 561 accused, with deliberate intent, did then and there sell and
dispose One (1) heat sealed plastic packet of white crystalline
THIRD DIVISION substance containing Methylamphetamine (sic) hydrochloride
locally known as "SHABU", weighing 0.03 gram, a dangerous
drugs.
[ G.R. No. 207229, September 20, 2017 ]
CONTRARY TO LAW.[3]
PEOPLE OF THE PHILIPPINES, PLAINTIFF-APPELLEE, VS. Upon arraignment Cabellon pleaded not guilty.[4] Trial on the
SIEGFRED CABELLON CABAÑERO, ACCUSED-APPELLANT. merits ensued.

DECISION Evidence for the prosecution showed that on April 13, 2006, a
buy bust operation was planned to capture Cabellon in the act
of selling drugs. At 7:30 p.m., PO2 Junar Rey Barangan (PO2
Barangan), PO3 Rey Bucao (PO3 Bucao), and PO3 Reynato
Abellar (PO3 Abellar) went to Sitio Jawod, Barangay Bulacao,
Talisay City to commence the buy-bust operation. The police
officers had a poseur-buyer with them.[5]
The asset poseur-buyer transacted with Cabellon in an alley,
while the police officers observed them from a distance. Once
they saw the poseur-buyer scratch his head, their pre-approved
signal, the police officers descended upon Cabellon, who then
ran away upon noticing the approaching officers.[6]
Cabellon ran and hid inside a nearby house and the police
officers followed him. The police officers stumbled upon three
(3) men sniffing shabu inside the house, one (1) of whom they
apprehended while the other two (2) managed to escape. The
police officers caught up with Cabellon inside the house, whom
they thereafter frisked. They recovered the marked P100.00 and
P50.00 bills from him.[7]
After Cabellon's arrest, the poseur-buyer handed over the
sachet of shabu he purchased from Cabellon to PO3 Bucao.[8]
That same date, a sachet marked with "SCC 04/13/06" was
turned over to the Philippine National Police Crime Laboratory
for examination. The Request for Laboratory Examination was
received by a certain PO1 Domael.[9]
P/S Insp. Mutchit G. Salinas (P/S Insp. Salinas), a forensic
chemist, confirmed executing Chemistry Report No. D-698-
2006. She testified that she had examined a heat-sealed plastic
sachet of white crystalline substance labelled with "SCC
04/13/06." The chemistry report bore the signatures of P/S
Insp. Salinas and P/Supt. Myrna P. Areola. The specimen
weighed 0.03 grams and tested positive for methamphetamine
hydrochloride (shabu).[10]
Cabellon was the only defense witness and he denied selling
shabu to the poseur-buyer.[11]
He claimed that on April 13, 2006, at about 3:30p.m., he was
buying barbecue when he saw his aunt, Jane Cabellon, crying.
He asked her why she was crying and he told her that she had a
fight with someone. He approached and slapped the lady his
aunt had a fight with. The lady then warned him that he would
be arrested for what he had done to her.[12]
Later that evening, at the barbecue station,[13] he was arrested
and bodily searched by some police officers; however, nothing
was recovered from him. He claimed that he was not informed
by the arresting officers of the offense he supposedly violated.[14]
Cabellon was then brought to the police station and was asked
to call somebody. He was also asked to pay for his release and
for the settlement of the case filed against him. He was unable
to pay or give a gift and declined to make the phone call; hence,
he was charged and a case was filed against him.[15]
On October 27, 2008, the Regional Trial Court[16] found that the
prosecution was able to prove all the elements for the illegal
sale of shabu.[17]Furthermore, PO3 Bucao and PO2 Barangan
identified the sachet sold by Cabellon to the poseur-buyer. The
seized sachet's chain of custody from the time Cabellon was
arrested until it was presented as evidence to the court was
accounted for.[18] The fallo of the trial court Decision read:
ACCORDINGLY, this court finds the accused GUILTY as
charged and sentences him to suffer the penalty of LIFE
IMPRISONMENT and to pay a fine of [P]500,000.00.
Exhibit "B" is forfeited in favor of the State for proper
disposition.
SO ORDERED.[19]
Cabellon filed an appeal before the Court of Appeals and raised
several errors. He claimed that the trial court erred in
upholding the validity of his arrest despite the blatant violation
of his right against unreasonable searches and when it relied on
the weakness of the defense evidence rather than on the
strength of the prosecution evidence. Additionally, he averred
that the prosecution failed to prove his guilt beyond reasonable
doubt.[20]
On August 30, 2012, the Court of Appeals[21] dismissed the
appeal and upheld the trial court decision.
The Court of Appeals held that the elements for the illegal sale
of shabu were duly proven by the prosecution.[22]
The Court of Appeals also downplayed the supposed necessity
of presenting the poseur-buyer as a witness in court since the
testimonies of the members of the apprehending team had
already sufficiently established the illegal sale between Cabellon
and the poseur-buyer.[23]
The Court of Appeals likewise waived the stringent application
of Section 21 of Republic Act No. 9165, considering the
circumstances obtaining in the case. The Court of Appeals
emphasized that the defense never questioned the integrity of
the evidence during trial and only did so upon appeal.
[24]
 The fallo of the Court of Appeals Decision read:
IN LIGHT OF THE FOREGOING, the appeal is DENIED. The
decision dated October 27, 2008 of the Regional Trial Court
(RTC), Brunch 58, Cebu City in Criminal Case No. CBU-76737
convicting Siegfred Cabellon y Cabañero for the crime of Sale of
Dangerous Drugs penalized under Section 5 of Republic Act No.
9165 is AFFIRMED in toto.
SO ORDERED.[25]
Cabellon filed a Notice of Appeal[26] on October 4, 2012, which
was noted and given due course by the Court of Appeals in its
April 29, 2013 Resolution.[27]
In its August 7, 2013 Resolution,[28] this Court notified the
parties that they may file their respective supplemental briefs.
Both parties manifested[29] that they were dispensing with the
filing of a supplemental brief.
Cabellon alleges that the supposed illegal sale was never proven
because the poseur-buyer was not presented to attest to the
alleged sale. Furthermore, the police officers were positioned at
a distance where they could not have seen the sale and could
merely rely on the poseur-buyer's signal. Cabellon insisted that
the fact of the sale was not proven beyond reasonable doubt.[30]
Cabellon also emphasizes that the police officers did not comply
with the mandatory requirements under Section 21, paragraph
1 of Republic Act No. 9165, requiring the apprehending team to
immediately physically inventory and photograph the seized
drugs in the presence of the accused, a representative from
media or the Department of Justice, and any elected official.[31]
Cabellon then points out that the prosecution was unable to
show an unbroken chain of custody, PO3 Bucao testified that
the poseur-buyer handed him the sachet after Cabellon was
arrested, but he never testified as to whom he gave it next or
who marked it.[32] Lastly, Cabellon asserts that he was not
informed either of his constitutional rights upon his arrest or
the reason for his arrest or detention.[33]
On the other hand, the prosecution claims that the poseur-
buyer's failure to testify was not fatal to the case since PO3
Bucao testified that he saw the sale.[34]
The prosecution argues that there was substantial compliance
with Section 21 of Republic Act No. 9165 because the integrity
and evidentiary value of the seized item was properly preserved.
The prosecution maintains that the circumstances surrounding
the arrest, where he was arrested in a house with three (3)
persons high on drugs, made it impossible to mark and
inventory the sachet on the spot.[35] The prosecution also avers
that the supposed violations of Section 21 of Republic Act No.
9165 were only raised for the first time on appeal.[36]
Finally, the prosecution denies that Cabellon was found guilty
based on his weak defense and holds that it has proven the
evidentiary integrity of the seized sachet proving Cabellon's guilt
beyond reasonable doubt. It asserts that the prosecution
witnesses have established Cabellon's guilt with their
straightforward and candid testimonies.[37]
The only issue for this Court's resolution is whether or not
accused-appellant Siegfred Cabellon's guilt was proven beyond
reasonable doubt despite the non-observance of the required
procedure under Section 21 of Republic Act No. 9165.
This Court grants the appeal and acquits Siegfred Cabellon y
Cabañero.
In order to sustain a conviction for the illegal sale of dangerous
drugs, these two (2) elements must be established by the
prosecution: "(1) proof that the transaction or sale took place
and (2) the presentation in court of the corpus delicti or the
illicit drug as evidence."[38]
To prove that the illegal sale of shabu took place, the
prosecution presented PO3 Bucao and PO2 Barangan, two (2) of
the police officers who were part of the buy-bust operation team
which apprehended the accused.
Both PO3 Bucao[39] and PO2 Barangan[40] testified that they had
seen the accused talk with the poseur-buyer before the latter
scratched his head, signalling that the transaction had taken
place. The marked money was recovered from the accused,
[41]
 while the poseur-buyer turned over the sachet with shabu he
had bought from the accused to PO3 Bucao.[42]
While the prosecution may have proven that a transaction took
place, it was not as convincing in its presentation of the
alleged corpus delicti as evidence.
People v. Jaafar[43] underscored the importance of presenting the
actual illicit drug or corpus delicti recovered as evidence since
its existence is essential to convict the accused. Thus:
In all prosecutions for violations of Republic Act No. 9165,
the corpus delicti is the dangerous drug itself. Its existence is
essential to a judgment of conviction. Hence, the identity of the
dangerous drug must be clearly established.
Narcotic substances are not readily identifiable. To determine
their composition and nature, they must undergo scientific
testing and analysis. Narcotic substances are also highly
susceptible to alteration, tampering, or contamination. It is
imperative, therefore, that the drugs allegedly seized from the
accused are the very same objects tested in the laboratory and
offered in court as evidence. The chain of custody, as a method
of authentication, ensures that unnecessary doubts involving
the identity of seized drugs are removed.[44] (Emphasis supplied)
Section 21 of Republic Act No. 9165 provides the manner by
which law enforcement officers should handle seized dangerous
drugs:
Section 21. Custody and Disposition of Confiscated, Seized,
and/or Surrendered Dangerous Drugs, Plant Sources of
Dangerous Drugs, Controlled Precursors and Essential
Chemicals, Instruments/Paraphernalia and/or Laboratory
Equipment. - The PDEA shall take charge and have custody of
all dangerous drugs, plant sources of dangerous drugs,
controlled precursors and essential chemicals, as well as
instruments/paraphernalia and/or laboratory equipment so
confiscated, seized and/or surrendered, for proper disposition
in the following manner:
 (1) The apprehending team having initial custody and control of
the drugs shall, immediately after seizure and
confiscation, physically inventory and photograph the same in
the presence of the accused or the person/s from whom such
items were confiscated and/or seized, or his/her representative
or counsel, a representative from the media and the Department
of Justice (DOJ), and any elected public official who shall be
required to sign the copies of the inventory and be given a copy
thereof[.] (Emphasis supplied)
Section 21 of the Implementing Rules and Regulations of
Republic Act No. 9165 further provides:
Section 21. Custody and Disposition of Confiscated, Seized
and/or Surrendered Dangerous Drugs, Plant Sources of
Dangerous Drugs, Controlled Precursors and Essential
Chemicals, Instruments/Paraphernalia and/or Laboratory
Equipment. - The PDEA shall take charge and have custody of
all dangerous drugs, plant sources of dangerous drugs,
controlled precursors and essential chemicals, as well as
instruments/paraphernalia and/or laboratory equipment so
confiscated, seized and/or surrendered, for proper disposition
in the following manner:
(a) The apprehending officer/team having initial custody and
control of the drugs shall, immediately after seizure and
confiscation, physically inventory and photograph the same in
the presence of the accused or the person's from whom such
items were confiscated and/or seized, or his/her representative
or counsel, a representative from the media and the Department
of Justice (DOJ), and any elected public official who shall be
required to sign the copies of the inventory and be given a copy
thereof: Provided, that the physical inventory and photograph
shall be conducted at the place where the search warrant is
served; or at the nearest police station or at the nearest office of
the apprehending officer/team, whichever is practicable, in case
of warrantless seizures; Provided, further, that non-compliance
with these requirements under justifiable grounds, as long as the
integrity and the evidentiary value of the seized items are
properly preserved by the apprehending officer/team, shall not
render void and invalid such seizures of and custody over said
items[.] (Emphasis supplied)
While it may be true that strict compliance with Section 21 of
Republic Act No. 9165 may be excused under justifiable
grounds, the integrity and evidentiary value of the seized items
must still be preserved by the apprehending officer.
This Court is not convinced that the prosecution was able to
prove the identity of the shabu supposedly seized from the
accused.
PO3 Bucao claimed that the poseur-buyer turned over to him
the sachet purchased from the accused and that he had
custody of the sachet until he reached the police station. He
then handed the sachet to PO3 Abellar, who supposedly
prepared the request for the chemical analysis of the seized
item. However, PO3 Bucao failed to identify who placed the
markings on the sachet:
(Pros. Canta) Q: How many packs of shabu did your
poseur[-]buyer handed it (sic) to you?
(PO3 Bucao) A: Only one.
Q: Who kept this pack of shabu from the place of the arrest to
the police station?
A: Myself.

Q: What did you do with this pack of shabu that you get (sic)
from the accused?
A: After we reach in (sic) our station I gave it to PO3 Abellar the
one pack of shabu.
Q: What did PO3 Abellar do with this one pack of shabu?
A: He made a request to the PNP Crime Lab for chemical
analysis.
....
Q: I am showing to you this one pack of white crystalline
substance with labeling "SCC" the date thereon, is that the
evidence you are referring to?
A: Yes[,] sir.
Q: Who then made the marking "SCC" and the date? 
A: I am not sure who made the marking.[45]
Even PO2 Barangan could not confirm who placed the markings
on the sachet:
(PROS. CANTA) Q: I am showing to you this one pack of white
crystalline substance marked as Exhibit B, with markings SCC
with a date, can you tell us if this is the same evidence that
your (sic) recovered from the accused?
A: Yes, sir.
Q: Why are you sure?
A: Because this is the one PO3 Bucao showed to me.
Q: And there are markings in this plastic pack containing this
small plastic pack of shabu SCC and the date 04/13/06, who
made that marking if you know?
A: I do not know[,] sir.[46]
People v. Nandi[47] expounded on the four (4) links that should
be established by the prosecution to constitute an unbroken
chain of custody:
[F]irst, the seizure and marking, if practicable, of the illegal drug
recovered from the accused by the apprehending officer; second,
the turnover of the illegal drug seized by the apprehending
officer to the investigating officer; third, the turnover by the
investigating officer of the illegal drug to the forensic chemist for
laboratory examination; and fourth, the turnover and
submission of the marked illegal drug seized from the forensic
chemist to the court.[48]
Undeniably, a noticeable gap exists in the chain of custody with
the prosecution's failure to present evidence that the seized
sachet was actually marked by any of the three (3)
apprehending officers.
The prosecution likewise did not present evidence that the
seized sachet was inventoried and photographed in the
presence of the accused or his representative, a representative
from the media or the Department of Justice, and an elected
public official. Neither did it provide an explanation as to why
the police officers did not follow the requirements provided
under the law.
PO3 Bucao also testified that he turned over the unmarked
seized sachet to PO3 Abellar, who then prepared the request to
the Philippine National Police for chemical analysis.[49] However,
a careful review of the Request for Laboratory
Examination[50] dated April 13, 2006 shows that not only did it
refer to a marked sachet, it was also signed by
P/Superintendent Romeo Pagal Perigo, not PO3 Abellar, who
supposedly prepared it. directed to report to this Court, within five (5) days from receipt
of this decision the action he has taken.
The prosecution utterly failed to proffer evidence on who placed
the markings on the sachet Furthermore, it also failed to The Regional Trial Court is directed to turn over the seized
account for the seized sachet's transfer from PO3 Bucao to the sachet of methamphetamine hydrochloride to the Dangerous
Philippine National Police Crime Laboratory for laboratory Drugs Board for destruction in accordance with law.
examination, creating another gap in the chain of custody.
Let entry of judgment be issued immediately. 
This blatant lack of compliance with the safeguards established
in Republic Act No. 9165 is made even more egregious by the SO ORDERED.
fact that the seized sachet only contained 0.03 grams[51] of
shabu, no more than a grain of rice. The danger of tampering Velasco, Jr., (Chairperson), Bersamin, Martires, and Gesmundo,
and planting of evidence was, thus, heightened, which should JJ., concur.
have put the lower courts on guard and not have so easily relied
on the presumption of regularity accorded to police officers in
the performance of their official acts. As this Court stated
in People v. Holgado:[52] November 29, 2017
While the miniscule amount of narcotics seized is by itself not a
ground for acquittal, this circumstance underscores the need NOTICE OF JUDGMENT
for more exacting compliance with Section 21. In Mallillin v.
People, this court said that "the likelihood of tampering, loss or Sirs / Mesdames:
mistake with respect to an exhibit is greatest when the exhibit
is small and is one that has physical characteristics fungible in Please take notice that on September 20, 2017 a Decision,
nature and similar in form to substances familiar to people in
copy attached hereto, was rendered by the Supreme Court in the
their daily lives."[53]
WHEREFORE, premises considered, the Decision dated August above-entitled case, the original of which was received by this
30, 2012 of the Court of Appeals in CA-G.R. No. CEB-CR HC Office on November 29, 2017 at 2:20 p.m.
No. 01081 is REVERSED and SET ASIDE. Accused-appellant
Siegfred Cabellon y Cabañero is hereby ACQUITTED for failure Very truly
of the prosecution to prove his guilt beyond reasonable doubt. yours,
He is ordered immediately RELEASED from detention, unless
he is confined for any other lawful cause. (SGD)
WILFREDO V.
Let a copy of this decision be furnished the Director of the LAPITAN
Bureau of Corrections, Muntinlupa City for immediate Division Clerk
 
implementation. The Director of the Bureau of Corrections is of Court
 NOW, THEREFORE, You are hereby ordered to immediately
release SIEGFRED CABELLON y CABAÑERO unless there are
other lawful causes for which he should be further detained,
ORDER OF RELEASE and to return this Order with the certificate of your proceedings
within five (5) days from notice hereof.
TO: The Director
       Bureau of Corrections  GIVEN by the Honorable PRESBITERO J. VELASCO, JR.,
       1770 Muntinlupa City Chairperson of the Third Division of the Supreme Court of the
Philippines, this20th day of September 2017.
GREETINGS:
Very truly
WHEREAS, the Supreme Court on September 20, yours,
2017 promulgated a Decision in the above-entitled case, the
dispositive portion of which reads: (SGD)
"WHEREFORE, premises considered, the Decision dated August WILFREDO V.
30, 2012 of the Court of Appeals in CA-G.R. No. CEB-CR HC LAPITAN
No. 01081 is hereby REVERSED and SET ASIDE. Accused- Division Clerk
appellant Siegfred Cabellon y Cabanero is  
of Court
hereby ACQUITTED for failure of the prosecution to prove his
guilt beyond reasonable doubt. He is ordered
immediately RELEASED from detention, unless he is confined  CArollo, pp. 92-105. The Decision was penned by Associate
[1]

for any other lawful cause. Justice Pamela Ann Abella Maxino and concurred in by
Associate Justices Edgardo L. Didos Reyes and Zenaida T.
Let a copy of this decision be furnished the Director of the Galapate-Laguilles of the Nineteenth Division, Court of Appeals,
Bureau of Corrections, Muntinlupa City for immediate Cebu City.
implementation. The Director of the Bureau of Corrections is
directed to report to this Court, within five (5) days from receipt [2]
 Id. at 10-11.
of this decision, the action he has taken.
[3]
 Id. at 10.
The Regional Trial Court is directed to turn over the seized
sachet of methamphetamine hydrochloride to the Dangerous [4]
 Id. at 51, RTC Decision.
Drugs Board for destruction in accordance with law.
[5]
 Id. at 52, RTC Decision.
Let entry of judgment be issued immediately. 
[6]
 Id.
SO ORDERED."
[7]
 Id. [23]
 Id. at 100-101.
[8]
 Id. at 53, RTC Decision. [24]
 Id. at 101-104.
[9]
 Id. at 51-52. [25]
 Id. at 105.

 Id. at 51 and 53. RTC referred to the substance as

[10] [26]
 Id. at 106-107.
"methylamphetamine hydrochloride."
[27]
 Id. at 111.
[11]
 Id. at 53-54, RTC Decision.
[28]
 Rollo, p. 22.
[12]
 Id.
[29]
 Id. at 23-26 and 27-28.
 TSN dated September 23, 2008, p. 4. TSN also refers to the
[13]

date as "September 23, 2007." [30]

 CA rollo, pp. 37-38.
[14]
 Id. at 54. [31]
 Id. at 38-39.
[15]
 Id. [32]
 Id. at 39-42.

 Id. at 51-58. The Decision, docketed as Criminal Case No.

[16] [33]
 Id. at 48-49.
CBU 76737, was penned by Presiding Judge Gabriel T. Ingles of
Branch 58, Regional Trial Court, Cebu City. [34]
 Id. at 74.
[17]
 Id. at 55-57. [35]
 Id. at 76-77.
[18]
 Id. at 57. [36]
 Id. at 78-79.
[19]
 Id. at 58. [37]
 Id. at 79-81.
[20]
 Id. at 31.  People v. Morales, 630 Phil. 215, 228 (2010) [Per J. Del
[38]

Castillo, Second Division] citing People v. Darisan, 597 Phil. 479

[21]
 Id. at 92-105. (2009) [Per J. Corona, First Division].
[22]
 Id. at 95-99. [39]
 TSN dated April 24, 2007, p. 4.
[40]
 TSN dated February 13, 2007, pp. 5-6.
[41]
 Id. at 7.
[42]
 TSN dated April 24, 2007, pp. 5-6.
Source: Supreme Court E-Library | Date created: January 08,
 G.R. No. 219829, January 18, 2017
[43]
2020 
<http://sc.judiciary.gov.ph/pdf/web/viewer.html?
This page was dynamically generated by the E-Library Content
file=/jurisprudence/2017/january2017/219829.pdf> [Per J.
Management System
Leonen, Second Division].

 Id. at 7, citing People v. Simbahon, 449 Phil. 74 (2003) [Per J.

[44]

Ynares-Santiago, First Division] and Mallillin v. People, 516 Phil. Supreme Court E-Library
576 (2008) [Per J. Tinga, Second Division].
[45]
 TSN dated April 24, 2007, p. 6.
[46]
 TSN dated February 13, 2007, p. 9.
[47]
 639 Phil. 134 (2010) [Per J. Mendoza, Second Division].

 Id. at 144-145, citing People v, Kamad, 624 Phil. 289 (2010)

[48]

[Per J. Brion, Second Division].

[49]
 TSN dated April 24, 2007, p. 6.
[50]
 RTC records, p. 8.
[51]
 Id. at 9.
[52]
 741 Phil. 78 (2014) [Per J. Leonen].

 Id. at 99, citing Mallillin v. People, 576 Phil. 576 (2008) [Per J.

[53]

Tinga, Second Division].


818 Phil. 406
EN BANC
[ G.R. No. 213200, September 19, 2017 ]
NAYONG PILIPINO FOUNDATION, INC., PETITIONER, VS.
CHAIRPERSON MA. GRACIA M. PULIDOTAN,
COMMISSIONER HEIDI L. MENDOZA, COMMISSIONER
ROWENA V. GUANZON, THE COMMISSIONERS,
COMMISSION ON AUDIT (COA), RESPONDENTS.
DECISION
REYES, JR., J: 
This is a petition for certiorari[1] under Rule 64 and Rule 65 of
the Rules of Court filed by petitioner Nayong Pilipino
Foundation, Inc. (NPFI), seeking to annul respondent
Commission on Audit's (COA) Decision dated November 20,
2013, and Resolution dated April 4, 2014.
The Decision dated November 20, 2013 affirmed Decision No.
2011-074 dated June 7, 2011 of the Adjudication and
Settlement Board (ASB) and Decision No. 2007-031 dated May
25, 2007 of the Legal and Adjudication Office (LAO)-Corporate,
both of which sustained Notice of Disallowance (ND) No. 2007-
001 dated June 14, 2007 relating to the payments of
Anniversary Bonus and Extra Cash Gift to NPFI's officers and
employees amounting to Php 108,000.00 and Php 90,500.00,
respectively, and excess honoraria to the members of the Bids
and Awards Committee (BAC) and Technical Working Group
(TWG) in the amount of Php 132,000.00.
The Facts
On June 6, 2000, in commemoration of NPFI's 30th Founding
Anniversary, NPFI Board of Trustees, through Board Resolution
No. 63-0606000, authorized the grant to its officers and
employees who have rendered services for at least one (1) year,
an Anniversary Bonus amounting to Php 3,000.00 each.
In May 2004, NPFI's Board of Trustees issued Board Resolution
No. 82-052104, where on the occasion of NPFI's 35th Founding
Anniversary, it authorized the grant of Anniversary Bonus
amounting to a total of Php 108,000.00 to its trustees,
employees, and Job Order personnel.[2] On even date, Board
Resolution No. 95-120804 was passed authorizing the release to
the same recipients, Extra Cash Gift in the total amount of Php
90,500.00.[3]
For 2004, NPFI paid a total of Php 132,000.00 as honoraria to
the members of its BAC and TWG.
On February 4, 2005, COA issued Audit Observation
Memorandum (AOM) No. 2004-002, finding that the grant of
NPFI in May 2004 of Anniversary Bonus and Extra Cash Gift
amounting to Php 108,000.00 and Php 90,500.00, respectively
have no legal basis nor approval of thePresident;[4] and AOM No.
2004-003, stating that NPFI did not submit the required
exemption from the Department of Budget and Management
(DBM) for the payment of honoraria to its BAC and TWG
members.
In response to AOM No. 2004-002, on April 28, 2005, NPFI sent
separate letters to the Office of the President[5] (OP) and
DBM[6] requesting approval of the grant of Anniversary Bonus
and Extra Cash Gift to NPFI officials and employees on. the
basis of Administrative Order No. 263 dated March 28, 1996
and National Budget Circular No. 452 dated May 20, 1996 and
Budget Circular No. 2002-4 dated November 28, 2002.
On September 30, 2005, acting on the referral for comment
and/or recommendation by the OP, the DBM issued a letter-
resolution.[7] Therein, DBM Secretary Romulo L. Neri concluded
that the payment to NPFI personnel of Anniversary Bonus for
the years 2000 and 2004 is unauthorized and contrary to
existing policy, as the reckoning date of the NPFI's anniversary
is November 6, 1972, the date of its establishment as a public
corporation under Presidential Decree (P.D.) No. 37, instead of
June 11, 1969, when it was a private corporation. Thus, NPFI's
entitlement to Anniversary Bonus shall be in 1987 on its
15th anniversary, 1992 on its 20th 1997 on its 25th, 2002 on its
30th and 2007 on its 35th anniversary.
Similarly, the DBM found the grant of Extra Cash Gift for the
year 2004 to be improper, considering that it was not
specifically authorized by law or approved by the President.
NPFI sought reconsideration[8] of the DBM Letter-Resolution but
the same remain unresolved.
On July 28, 2005, COA LAO-Corporate issued Notice of
Suspension No. NPFI-05-001-(04)[9] dated July 28, 2005,
suspending the subject disbursements and requiring NPFI to
submit the required documents. On reconsideration, COA LAO-
Corporate found the documents submitted by NPFI in its letter
manifestation insufficient; thus on May 25, 2007, it issued
Notice of Disallowance No. NPFI 2007-001[10] and Decision No.
2007-031, the dispositive portion of which reads:
WHEREFORE, the premises considered, and in view of
Management's compliance with our requirements on the
allowances granted to OGCC lawyers charged to NPFI, this
Office LIFTS the suspension thereon and accordingly allows the
same in audit. However, as regard the other suspended
payments for anniversary bonus and Christmas cash gift as
well as the excessive honoraria to BAC members under the
same NS, said payments have matured into disallowance for
non-compliance of the audit requirements. Accordingly, Notice
of Disallowance No. 2007-001 is hereby issued by this Office.[11]
On appeal, the Adjudication and Settlement Board (ASB)
dismissed the appeal and affirmed the Decision of the LAO-
Corporate through its Decision No. 2011-074 dated June 7,
2011.[12]
NPFI filed a Petition for Review before the COA but the same
was denied by the Commission proper en banc in its Decision
No. 2013-206 dated November 20, 2013.[13] Motion for
Reconsideration[14] of the said Decision was denied in a
Resolution dated April 4, 2014,[15]prompting NPFI to file the
instant petition for certiorari.
NPFI maintains in this petition that the COA gravely abused its
discretion when it disallowed the payment of the total aggregate
amount of Php 330,500.00 comprising of Anniversary Bonus,
Extra Cash Gift, to its trustees, officials, and personnel;
and honoraria to the members of its BAC and TWG..
NPFI argues that Administrative Order (A.O.) No. 263 dated
March 28, 1996 and DBM National Budget Circular No. 452
dated May 20, 1996 explicitly authorize the grant of
Anniversary Bonus to agencies in celebration of their milestone
year in the amount of Php 3,000.00, as in the case at bar where
it was granted in celebration of NPFI's 30th and 35th anniversary.
Further, NPFI argues that COA should have allowed the
35thAnniversary Bonus given in 2004 to be applied in 2007
considering that the pronouncement that NPFI's anniversary
should be reckoned from November 6, 1972 instead of June 11,
1969, was made only on September 11, 2005.
Anent the allowance of Extra Cash Gift, NPFI claims that same
is supported by DBM Budget Circular No. 2002-04 dated
November 28, 2002, which then President Gloria Macapagal-
Arroyo approved.
All told, NPFI points out that COA should not have disallowed
the grant of Anniversary Bonus and Extra Cash Gift as it is still
the subject of a Motion for Reconsideration pending before the
OP through the DBM.
On the matter of honoraria given to its BAC and TWO members,
NPFI alleges that COA erred in making a sweeping disallowance
absent any evidence that the same is in excess of the 25% (of
the basic salary) ceiling set forth under Section 15 of Republic
Act (R.A.) No. 9184.
Finally, NPFI, citing good faith at the time the disallowed
benefits were granted and received, seeks this Court's
consideration to rule in its favor.
On the other hand, the respondents claim, in sum, that no
grave abuse of discretion may be attributed to them in affirming
the disallowance of the Anniversary Bonus and Extra Cash Gift
granted to NPFI's trustees, officials and personnel;
and honoraria to its BAC and TWG members, as the same is
supported by pertinent laws, circulars, and orders.
The Issue
The lone issue presented for resolution in this case is whether
the COA gravely abused its discretion when it disallowed NPFI's
payment of Anniversary Bonus and Extra Cash Gift to its
trustees, officials and personnel; and honoraria to its BAC and
TWG members.
Ruling of the Court
The petition is partly meritorious.
The COA, by mandate of the 1987 Constitution, is the guardian
of public funds, vested of broad powers over all accounts
pertaining to government revenue and expenditures and the
uses of public funds and property, including the exclusive
authority to define the scope of its audit and examination, to
establish the techniques and methods for such review, and to
promulgate accounting and auditing rules and regulations.[16]
In the exercise of its constitutional duty, the COA is given a
wide latitude of discretion "to determine, prevent, and disallow
irregular, unnecessary, excessive, extravagant, or
unconscionable expenditures of government funds"[17] and has
the power to ascertain whether public funds were utilized for
the purpose for which they had been intended by law.[18]
In the performance of COA's functions, the Court has been
consistent with its policy enunciated in the case of Nazareth v.
Hon. Villar, et al.:[19]
Verily, the Court has sustained the decisions of administrative
authorities like the COA as a matter of general policy, not only
on the basis of the doctrine of separation of powers but also
upon the recognition that such administrative authorities held
the expertise as to the laws they are entrusted to enforce.[20]
Thus, the Court has accorded not only respect but also finality
to COA's findings particularly when their decisions are not
tainted with unfairness or arbitrariness that would amount to
grave abuse of discretion.[21]
To warrant the issuance of the extraordinary writ
of certiorari under Rule 64 in relation to Rule 65 of the Rules of
Court and set aside the Decision of the COA, the petitioner
must show that the latter acted without or in excess of
jurisdiction or with grave abuse of discretion amounting to lack
or excess of jurisdiction.
Mere abuse of discretion is not enough. The abuse of discretion
must be grave in that there is a capricious and whimsical
exercise of judgment which is equivalent to lack of jurisdiction.
Abuse of discretion is grave when there is an evasion of a
positive duty or a virtual refusal to perform a duty enjoined by
law or to act in contemplation of law as when the judgment
rendered is not based on law and evidence but on caprice,
whim, and despotism.[22]
In this case, the Court finds that the petitioner NPFI failed to
discharge this burden. The respondents did not commit any
grave abuse of discretion as their concurrence to the decisions
of the LAO-Corporate and ASB is based on cogent legal
grounds.
First, the Court agrees with the COA in that the award of
Anniversary Bonus for the year 2004 is unwarranted for failure
to comply with the requirements set forth under A.O. No. 263
and DBM NBC No. 452-96.
A.O. No. 263,[23] issued on March 28, 1996 provides for general
authority to Government-owned and controlled corporations
(GOCCs), Government Financial Institutions (GFIs), and
national government agencies to commemorate milestone
anniversaries through the grant of anniversary bonus to their
employees in an amount not exceeding Php 3,000.00. To
amplify and clarify the implementation of the order, the DBM
issued NBC No. 452-96[24] on May 20, 1996.
From these guidelines, the Court can infer the following rules
relative to the grant of Anniversary Bonus and pertinent to the
issue at hand:
a) All government personnel whether employed on a regular or
part time basis, or under permanent, temporary or casual
status, and contractual personnel whose employment is in the
nature of a regular employee, who have been appointed as such
in a specific government entity by virtue of a valid appointment
and continue to be employed in the same government entity as
of the occasion of its milestone anniversary, shall be entitled to
the Anniversary Bonus;
b) The Anniversary Bonus may only be granted in celebration of
milestone year or the 15th anniversary and to every fifth year
thereafter; and
c) The counting of milestone year shall start from the year the
government entity was created regardless of whether it was
subsequently renamed or reorganized provided that its original
primary functions have not substantially changed.
Applied in this case, considering that the grant specifically
covers government entities and commemorates their creation as
such, the DBM and COA are correct in that for the purpose of
determining entitlement to Anniversary Bonus, NPFI's milestone
year should be reckoned from the date it was incorporated as a
public corporation by virtue of Presidential Decree No. 37 or on
November 6, 1972 instead of June 11, 1969 when it was then
incorporated as a private corporation. It follows therefore, that
NPFI is entitled to Anniversary Bonus in 1997 for its
25thAnniversary, 2002 for its 30th and 2007 for its
35th Anniversary. Clearly, the payment of Anniversary Bonus in
2000 and 2004 is therefore unauthorized.
That notwithstanding, as NPFI granted the Anniversary Bonus
and the recipients received the same in good faith, acting on the
honest belief based on NPFI's articles of incorporation that its
founding anniversary is reckoned from May 7, 1969 and
traditionally observed on June 11, 1969, no refund is necessary
consistent with the Court's ruling in the case of Nazareth[25] that
"the refund of the disallowed payment of a benefit granted by
law to a covered person, agency or office of the Government may
be barred by the good faith of the approving official and of the
recipient." In so ruling, the Court in Nazareth followed the
doctrine laid down in Blaquera v. Alcala[26] and De Jesus v.
Commission on Audit.[27]
In Blaquera,[28] the Petition assailed the constitutionality of
Administrative Order (A.O.) Nos. 29 and 268, issued on January
19, 1993 and February 21, 1992, respectively. The subject
A.O.s grant officials and employees of the government
Productivity Incentive Benefits (PIB) and prohibit at the same
time the grant of similar benefit in the future without prior
approval from the President. A.O.·No. 29 further orders the
refund of any amount granted as PIB for the year 1992 in
excess of Php 1,000.00. The Court upheld the validity of the
subject A.O.s as valid exercise of the President's power of
control. Nonetheless, it saw no need to order the refund of the
excessive PIB paid on account of good faith of the parties, viz.:
Considering, however, that all the parties here acted in good
faith, we cannot countenance the refund of subject incentive
benefits for the year 1992, which amounts the petitioners have
already received. Indeed, no indicia of bad faith can be detected
under the attendant facts and circumstances. The officials and
chiefs of offices concerned disbursed such incentive benefits in
the honest belief that the amounts given were due to the
recipients and the latter accepted the same with gratitude,
confident that they richly deserve such benefits.[29]
The ruling in Blaquera was reiterated and applied in the case
of De Jesus.[30] In De Jesus, the petitioners assail the Decision of
the COA which affirmed the disallowance of payment of
allowances and bonuses to members of the interim Board of
Directors of the Catbalogan Water District. The Court speaking
through Justice Carpio, held that the members of the board of
water districts cannot receive allowances and benefits in excess
of that allowed by Presidential Decree No. 198, citing the then
recently decided case of Baybay Water District v. Commission on
Audit.[31] Similar to the ruling in Blaquera however, the Court
did not order the refund of the disallowed benefits, explaining
that:
Petitioners here received the additional allowances and bonuses
in good faith under the honest belief that LWUA Board
Resolution No. 313 authorized such payment. At the time
petitioners received the additional allowances and bonuses, the
Court had not yet decided Baybay Water District. Petitioners
had no knowledge that such payment was without legal basis.
Thus, being in good faith, petitioners need not refund the
allowances and bonuses they received but disallowed by the
COA.[32] (Citation omitted)
Indeed, akin to the foregoing cases, no bad faith may be
attributed to NPFI. Jurisprudence defines good faith in relation
to the requirement of refund of disallowed benefits or
allowances, to wit:
Good faith, in relation to the requirement of refund of
disallowed benefits or allowances, is that state of mind denoting
honesty of intention, and freedom from knowledge of
circumstances which ought to put the holder upon 'inquiry; an
honest intention to abstain from taking any unconscientious
advantage of another, even though technicalities of law,
together with absence of all information, notice, or benefit or
belief of facts which render transactions 'unconscientious.[33]
In this case, the reckoning point for the counting of the
milestone year insofar as agencies such as NPFI which is first
brought to existence as a private corporation has not been
expressly provided in A.O. No. 263 nor clearly specified under
DBM NBC No. 452-96. Simply, NPFI's Board of Trustees,
officials, and employees have no way of knowing that they are
mistaken in following the traditional celebration of NPFI's
anniversary on June 11, 1969. With this, it can be concluded
that the NPFI Board of Trustees, officials, and employees are in
good faith more so that the disallowed Anniversary Bonus was
granted prior to the pronouncement of the OP through the DBM
and the COA as to the proper counting of its milestone year.
The Court is therefore of the belief that the Board of Trustees of
NPFI in granting such Anniversary Bonus were impelled by the
honest belief that they are due, and the employees in receiving
the same acted in good faith that they are entitled to such
benefit, thus barring any need for refund.[34]
The same principle of good faith cannot however be applied
insofar as the grant of NPFI in 2004 of Extra Cash Gift in favor
of its officials and employees and of honoraria to the members
of the BAC and the TWG.
NPFI based its grant of Extra Cash Gift pursuant to DBM
Budget Circular 2002-4 dated November 28, 2002, which then
President Gloria Macapagal-Arroyo approved. As NPFI itself
stated in its Letter[35] dated April 28, 2005 to the OP, the said
Budget circular authorizes the grant of Extra Cash Gifts only for
the year 2002. In light of its explicit language, it cannot
therefore be simply implied that the Circular provides sufficient
authority for the grant of similar benefit for the succeeding
years without the need of approval by the President.
Similarly, the Court finds no error on the part of COA in
disallowing the grant of honoraria to the members of the BAC
and TWG of NPFI.
NPFI argues that its grant of honoraria is supported by Section
15 Article V of R.A. No. 9184 otherwise known as the
Government Procurement Reform Act, which provides:
SEC. 15. Honoraria of BAC Members. - The Procuring Entity
may grant payment of honoraria to the BAC members in an
amount not to exceed twenty five percent (25%) of their
respective basic monthly salary subject to availability of funds.
For this purpose, the Department of Budget and Management
(DBM) shall promulgate the necessary guidelines.
In effect, NPFI claims that even in the absence of a DBM
Circular at the time of payment, the law offers sufficient basis
for the allowance of the honoraria in an amount not exceeding
25% of the basic salary. NPFI is mistaken.
The Court in Sison, et al. v. Tablang, et al.,[36] ruled that the
provision of itself cannot serve as basis for the grant of
honoraria to the members of the BAC without an enabling rule
or guideline from the DBM; and compliance therewith is
necessary for the right to accrue. We quote:
An honorarium is defined as something given not as a matter of
obligation but in appreciation for services rendered, a voluntary
donation in consideration of services which admit of no
compensation in money. Section 15 of R.A. No. 9184 uses the
word "may" which signifies that the honorarium cannot be
demanded as a matter of right.
The government is not unmindful of the tasks that may be
required of government employees outside of their regular
functions. It agrees that they ought to be compensated; thus,
honoraria are given as a recompense for their efforts and
performance of substantially similar duties, with substantially
similar degrees of responsibility and accountability. However,
the payment of honoraria to the members of the BAC and the
TWG must be circumscribed by applicable rules and guidelines
prescribed by the DBM, as provided by law. Section 15 of R.A.
No. 9185 is explicit as it states: "For this purpose, the DBM
shall promulgate the necessary guidelines." The word "shall"
has always been deemed mandatory, and not merely
directory. Thus, in this case, petitioners should have first
waited for the rules and guidelines of the DBM before
payment of the honoraria. As the rules and guidelines were
still forthcoming, petitioners could not just award themselves
the straight amount of 25% of their monthly basic salaries as
honoraria. This is not the intendment of the law.
Furthermore, albeit in hindsight, the DBM Budget Circular
provides that the payment of honoraria should be made only for
"successfully completed procurement projects." This phrase was
clarified in DBM Budget Circular No. 2004-5A dated October 7,
2005, to wit:
5.1 The chairs and members of the Bids and Awards Committee
(BAC) and the Technical Working Group (TWG) may be paid
honoraria only for successfully completed procurement projects.
In accordance with Section 7 of the Implementing Rules and
Regulations Part A (IRR-A) of RA No. 9184, a procurement
project refers to the entire project identified, described, detailed,
scheduled and budgeted for in the Project Procurement
Management Plan prepared by the agency.
A procurement project shall be considered successfully
completed once the contract has been awarded to the winning
bidder.
No interpretation is needed for a law that is clear, plain and free
from ambiguity. Now, the DBM has already set the guidelines
for the payment of honoraria as required by law. Since the
payment of honoraria to petitioners did not comply with the law
and the applicable rules and guidelines of the DBM, the notices
of disallowance are hereby upheld.[37] (Citations omitted,
emphasis and underscoring supplied)
In ligt of the aforesaid ruling therefore, since the payments of
the honoraria to the members of the BAC and TWG by NPFI
were made on January 16, 2014, February 10, 2004, and
March 9, 2004, prior to the issuance on March 23, 2004 of
DBM Circular No. 2004-5 which sets forth the guidelines on the
grant of honoraria to government personnel involved in
procurement, and absent proof of completed procurement
projects in accordance with the circular, the disallowance is
proper.
Liability in cases of refund for unlawful expenditures of
government funds is governed by Section 103 of Presidential
Decree No. 1445, which states:
Section 103. General liability for unlawful expenditures.
Expenditures of government funds or uses of government
property in violation of law or regulations shall be a personal
liability of the official or employee found to be directly
responsible therefor.
The provision is read in relation to Section 19 of the Manual of
Certificate of Settlement and Balances, COA Circular No. 94-
001, to wit:
19.1. The liability of public officers and other persons for audit
disallowances shall be determined on the basis of: (a) the nature
of the disallowance; (b) the duties, responsibilities or obligations
of the officers/persons concerned; (c) the extent of their
participation or involvement in the disallowed transaction; and
(d) the amount of losses or damages suffered by the government
thereby.
19.1.3. Public officers who approve or authorize transactions
involving the expenditure of government funds and uses of
government properties shall be liable for all losses arising out of
their negligence or failure to exercise the diligence of a good
father of a family.
Interpreting the foregoing provisions, jurisprudence settled that
insofar as the disallowance of benefits and allowances of
government employees, recipients or payees need not refund
these disallowed amounts in the absence of proof to rebut the
presumption that they received the same in good faith.
However, officers who participated in the approval of the
disallowed allowances or benefits are required to refund the
disallowed benefits when in so granting, they acted in bad faith
or are grossly negligent tantamount to bad faith, as when an
explicit provision of law, rule or regulation has been violated.
[38]
 The liability of the "participating" public officers in this
instance stands whether or not they received the disallowed
benefit.[39]
In fine, while NPFI's Board of Trustees and officers, as public
officials, hold in their favor the presumption of regularity in the
performance of their official duties, the same must fail in the
presence of an explicit law, rule or regulation that have been
violated.[40] On the grant of Extra Cash Gift, NPFI's Board of
Trustees are armed with the knowledge of the existence and of
the particulars of DBM Budget Circular 2002-4, which by
explicit language provides authority for the release of xtra Cash
Gift only for the year 2002. Similarly, Section 15, Article V of
R.A. No. 9184, which served as the basis for NPFI's grant of
honoraria to the members of its BAC and TWG is clear and
unambiguous in that the same is circumscribed by the
guidelines to be set by the DBM, and may therefore be granted
only after the promulgation thereof.[41] In view of the foregoing
transgressions therefore, NPFI cannot claim good faith and the
disallowed Extra Cash Gift and honoraria are due for refund.
Noteworthy, following the aforecited provisions which deal with
the liability of public officers for unlawful expenditures, the
Court cannot subscribe and limit the imposition of solidary
liability to refund the disallowed benefits to the persons
enumerated by the COA LAO-Corporate in Notice of
Disallowance No. NPFI-2007-001[42] and Notice of Suspension
No. NPFI-05-001-(04).[43]
In Notice of Disallowance NPFI-2007-001, the Audit Team
Leader after evaluation found the following persons liable for
the grant of Extra Cash Gift and honoraria: Atty. Charito L.
Planas, Executive Director - for approving the transactions;
Jonas Ma. Serrano, Administrative Officer IV - for certifying the
expenses as lawful; Lucy Q. Lapinig, Accountant I - for
certifying that adequate funds are available and the
expenditures as proper.[44] The same persons were adjudged to
be liable in Notice of Suspension No. NPFI-05-001-(04).
[45]
 However, as explained by the Court in the recent case
of Rhodelia L. Samba and Loryl J. Avila v. COA,[46] pursuant to
Book VI, Chapter V, Section 43[47] of the Administrative Code,
"public officials who are directly responsible for, or participated
in making the illegal expenditures as well as those who actually
received the amounts therefrom shall be solidarily liable for
their reimbursement."
As previously discussed, considering that the employee-
recipients are in good faith, they are absolved from the liability
to refund. In contrast, on account of bad faith and clear
transgression of R.A. No. 9184 and DBM Budget Circular No.
2002-4, apart from the persons enumerated in the subject
Notices of disallowance and suspension, NPFI's Board of
Trustees and officers who approved and authorized the release
of the disallowed Extra Cash Gift and honorarium are likewise
adjudged to be solidarily liable to refund the same.
Please take notice that on September 19, 2017 a
Decision/Resolution, copy attached herewith, was rendered by
the Supreme Court in the above-entitled case, the original of
which was received by this Office on October 3, 2017 at 9:13
a.m.

WHEREFORE, in light of the disquisitions, the Very truly

Court AFFIRMS the Decision of Commission on Audit yours,
proper en banc dated November 20, 2013, and Resolution dated
April 4, 2014 subject to the MODIFICATION in that the (SGD)
trustees, officials, and personnel of Petitioner Nayong Pilipino FELIPA G.
Foundation, Inc. (NPFI) who received the Anniversary Bonus in BORLONGAN-
2004 need not refund the same. ANAMA
Clerk of Court
However, with respect to the Extra Cash Gift and honorarium in
the amount of Php 90,500.00 and Php 132,000.00, respectively,
NPFI's Board of Trustees and officers who participated in the  Designated Acting Chief Justice per Special Order No. 2483
**

approval and authorized the release of the same are hereby dated September 14, 2017.
adjudged to be solidarity liable for their refund.
[1]
 Rollo, pp. 3-17. 
SO ORDERED.
[2]
 Id. at 53. 
Sereno, C. J., on leave.
Carpio,** Velasco, Jr., Leonardo-De Castro, Peralta, Bersamin, Del [3]
 Id. at 54-55. 
Castillo, Leonen, Jardeleza, Caguioa, and Martires, JJ., concur.
Perlas-Bernabe, J., on official leave. [4]
 Id. at 56-58. 
Tijam, J., on official leave.
Gesmundo, J., on official leave. [5]
 Id. at 59-60. 
[6]
 Id. at 61. 

NOTICE OF JUDGMENT
[7]
 Id. at 62-63. 

Sirs/Mesdames:
[8]
 Id. at 64-65.
[9]
 Id. at 66-71. 
WHEREAS, the government deems it desirable and fitting to
[10]
 Id. at 41-46.  commemorate milestone anniversaries of GOCCs, GFIs, and
national government agencies as well by way of granting
[11]
 Id. at 9, 48.  anniversary bonus to their employees; 
[12]
 Id. at 47-52. WHEREAS, the grant of anniversary bonus on the occasion of
milestone years of government agencies will directly improve
[13]
 Id. at 24-30.  and enhance employee morale consistent with Section 36(2),
Chapter 5, Subtitle A, Title I, Book V of Executive Order No.
[14]
 Id. at 32-40. 292, the Administrative Code of 1987; 
[15]
 Id. at 31. WHEREAS, there is a need to regulate the grant of such benefit
by adopting a uniform scheme for its implementation to ensure
[16]
 Yap v. Commission on Audit, 633 Phil. 174 (2010). fairness and equity and to conform with the policy of
standardization of compensation enunciated under Republic Act
 Technical Education and Skills Development Authority v. The
[17]
No. 6758; 
Commission on Audit, et al., 753 Phil. 434 (2015).
WHEREAS, Section 17 Article VII of the 1987 Constitution vests
[18]
 Nazareth v. Villar, 702 Phil. 319 (2013). in the President of the Philippines prerogatives which include,
among others the determination of the rates, timing and
[19]
 Id.  schedule of payment, and final authority to commit limited
resources of government for the payment of personnel
[20]
 Id. at 324.  incentives, cash rewards, bonuses and other forms of additional
compensation and fringe benefits to government personnel. 
[21]
 Id. 
NOW, THEREFORE, I, FIDEL V. RAMOS, President of the
[22]
 Espinas, et. al. v. Commission on Audit, 731 Phil. 67 (2014). Philippines, by virtue of the powers vested in me by law, do
hereby order the grant of Anniversary Bonus in accordance with
 AUTHORIZING THE GRANT OF ANNIVERSARY BONUS TO
[23]
the rules prescribed hereunder:
OFFICIALS AND EMPLOYEES OF GOVERNMENT ENTITIES 
1.0 Coverage/Exemption.
WHEREAS, certain Government Financial Institutions (GFIs)
have been authorized to celebrate and commemorate milestone 1.1 All government personnel whether employed on a full-time
anniversaries with the traditional grant of Anniversary Bonus to or regular, part-time basis or under permanent, temporary or
their officials and employees;  casual status, and contractual personnel whose employment is
in the nature of a regular employee, who have been appointed
as such in a specific government entity by virtue of a valid
appointment and continue to be employed in the same
government entity as of the occasion of its milestone
anniversary, shall be entitled to the anniversary bonus.  applied to all its officials and employee.
1.2 Government personnel who have been found guilty of any
offense in connection with their work during the five-year
interval between milestone years, as defined in 2.5 herein, shall
not be entitled to the immediately succeeding anniversary
bonus.
2.0 Rules and Regulations.
2.1 "Government entities" shall refer to department, bureaus,
offices, commissions and similar bodies of the national
government, including GOCCs and GFIs; provided that staff
bureaus or entities which form part of the organization
structure of departments or offices shall be deemed absorbed by
the latter and shall not be treated as a separate agency.
2.2 A frontline bureau or entity created as such under a distinct
enabling act or law and, thus, deemed as an institution in its
own right shall be considered a distinct and separate agency for
purposes of this benefit notwithstanding that fact that it had
since been organizationally integrated with a department or
office.
2.3 The Anniversary Bonus authorized under this Order shall
be granted only during milestone years.  government financial institutions the amount shall be charged
2.4 A milestone year refers to the 15th anniversary and to every
fifth year thereafter. 2.5 Payment of the Anniversary Bonus
shall be in an amount not exceeding P3,000.00 each employee
provided that the employee has rendered at least one (1) year
service in the same agency as of the date of the milestone year.
2.5.1 In case of insufficiency of funds, the government entity
concerned may grant the benefit at a rate lower than that
prescribed herein, provided that such rate shall be uniformly
 
2.6 An employee may receive Anniversary Bonus only once
every five years, regardless of transfers from one government
entity to another.
2.7 Government entities which have already passed a milestone
year as defined herein prior to the effectivity of this Order
without previously granting an anniversary bonus or a similar
incentive may grant the Anniversary Bonus therefor in 1996
subject to the same conditions specified herein. 
2.8 No other bonus or allowance or whatever name it may be
called of similar nature which relate to or in connection with an
entity's anniversary shall be granted.
2.9 Existing administrative authorizations granting similar
benefits to specific government entities are hereby revoked and
superseded by this authorization.
3.0 Funding Source. The cost of implementing the benefit under
this Order shall be sourced strictly from savings from released
allotment for current operating expenditures provided that all
authorized mandatory expenses shall have been paid first. For
government-owned and/or -controlled corporations and
against their respective corporate funds. 
4.0 Responsibility of the Agency Head. The heads of concerned
government entities shall be held responsible and personally
liable for any payment of Anniversary Bonus not in accordance
with the provisions of this Order, without prejudice to the
refund of any excess payment by the employee concerned.
5.0 Savings Clause. Cases not covered by the provisions of this
Order shall be submitted to the Secretary of Budget and
Management for appropriate evaluation and recommendation to
the Office of the President.
2.1.1. Those who are on absence without leave (AWOL) as of the
date of the milestone year for which the Anniversary Bonus is
being paid;
2.2 Those who are no longer in service in the same government
entity as of the date of the milestone year;

6.0 Effectivity. 2.3 Those who are not hired as part of the organic manpower of
government entities but as consultant or experts for a limited
This Order shall take effect immediately.  period to perform specific activities or services with expected
outputs; student laborers; apprentices; laborers of contracted
DONE in the City of Manila, this 28th day of March in the year projects; mail contractors, including those paid by piecework
of Our Lord, Nineteen Hundred and Ninety-Six.  basis; and others similarly situated. 

(Sgd.) FIDEL V. RAMOS  3. The following are additional rules and regulations relative to
President of the Philippines  the grant of Anniversary Bonus 
By the President: 
(Sgd.) RUBEN D. TORRES  3.1 Officials and employees may be granted Anniversary Bonus
Executive Secretary  only if the government entity where they are employed has been
in existence for at least fifteen (15) years and has not yet
 Amplifying and Clarifying the Implementation of the Grant of
[24]
granted any Anniversary Bonus as of FY 1996, and have
Anniversary Bonus to Officials and Employees of Government rendered at least one (1) year service in the same government
Entities  entity as of the date of the milestone year (See Illustrative
Example l, Annex A)
1. Purpose 
3.2 The counting of milestone years shall start from the year the
The Circular is issued to amplify and clarify the implementation government entity was created regardless of whether it was
of the grant of Anniversary Bonus to officials and employees of subsequently renamed/reorganized provided that its original
government entities as authorized under the Administrative primary functions have not substantially changed. Otherwise,
Order No. 263 dated March 28, 1996.  the counting shall start from the date the functions were
substantially changed. 
2. The exemption on the grant of Anniversary Bonus as
provided under Administrative Order No. 263 is hereby 3.3 The counting of the milestone years of merged government
expanded to include government personnel under the following entities shall start from the date they were merged.
circumstances:
3.4 The initial grant of Anniversary Bonus in 1996 shall be for
the latest milestone only, regardless of whether the government Operating Expenses (COE) without the need for prior authority
entity has existed for 30, 35, 50, or 60 or more years. There from the Department of Budget and Management, provided that
shall be no retroactive payment of milestone years. all authorized mandatory expenses shall have been paid first.
Requests for augmentation of such savings shall not be allowed.
3.5 A government entity which is now, for example, on its 18th
anniversary but has not granted any Anniversary Bonus may 5. Responsibility of the Head of Entity
grant the same for its 15th milestone year 1 in FY 1996. Two
years hence, or in FY 1998, Anniversary Bonus for the next The head of entity shall be held responsible and personally
milestone year -the 20th anniversary -may be granted.  liable for any payment of Anniversary Bonus not in accordance
with the provisions of Administrative Order No. 263 and this
3.6 An official or employee of a government entity in the Circular without prejudice, however, to refund of any= excess
example in 3.5 above, who was hired after the government payment by the official or employee concerned. 
entity's 15th milestone year shall not qualify to receive the
Anniversary Bonus in FY 1996, but only to the Anniversary 6. Saving Clause 
Bonus that will be granted in FY 1998. (See Illustrative Example
2, Annex A)  Appropriate cases not covered by the provisions of this Circular
shall be submitted to the Secretary of Budget and Management
3.7 Officials and employees in government entities attached to for appropriate resolution.
or are placed directly under a department/department level
government entity and whose creation is not through charter 7. Effectivity
may be considered as organic personnel of the mother
department for purposes of availment of the Anniversary Bonus This Circular shall take effect immediately. 
due the officials and employees of the department. 
[25]
 Nazareth v. Villar, 702 Phil. 319 (2013).
3.8 A government entity which attained its latest milestone year
in FY 1996 and has granted Anniversary Bonus that is less [26]
 356 Phil. 678 (1998).
than P3,000 per official and employee prior to the issuance of
Administrative Order No. 263 may grant the difference between [27]
 451 Phil. 814 (2003).
the actual amount granted and P3,000.Where the amount
granted is more than P3,000, the excess amount shall be [28]
 Supra note 26.
refunded.
[29]
 Id. at 765-766.
4. Funding Source 
[30]
 Supra note 27.
The cost to implement the Anniversary Bonus shall be solely
charged from savings from released allotment for Current [31]
 425 Phil. 326 (2002).
[32]
 De Jesus v. COA, supra note 27, at 824.  [46]
 G.R. No. 223244, June 20, 2017.

 Zamboanga City Water District, et al. v. COA, G.R. No.

[33]
 Book VI, Chapter V, Section 43 of the Administrative Code,
[47]

213472, January 26, 2016, 782 SCRA 78, 80, citing Philippine provides:
Economic Zone Authority v. Commission on Audit, 690 Phil. 104
(2012). Liability for Illegal Expenditures. - Every expenditure or
obligation authorized or incurred in violation of the provisions
 Zamboanga City Water District, et al. v. COA, G.R. No.
[34]
of this Code or of the general and special provisions contained
213472, January 26, 2016, 782 SCRA 78. in the annual General or other Appropriations Act shall be void.
Every payment made in violation of said provisions shall be
 Re: Confirming approval of the grant of Anniversary Bonus
[35]
illegal and every official or employee authorizing or making such
and Extra Cash Gift for NFP Officials and Workers; rollo pp. 59- payment, or taking part therein, and every person receiving
60. such payment shall be jointly and severally liable to the
Government for the full amount so paid or received.
[36]
 606 Phil. 740 (2009).
[37]
 Id. at 750-751. 

 Rhodelia L. Sambo and Loryl J. Avila v. COA, G.R. No.

[38]

223244, June 20, 2017; Maritime Industry Authority (MIA) v.

COA, 750 Phil. 288 (2015).
[39]
 Silang v. COA, 769 Phil. 327 (2015).
Source: Supreme Court E-Library | Date created: January 07,
[40]
 Rhodelia L. Sambo and Loryl J. Avila v. COA, supra note 38. 2020 
This page was dynamically generated by the E-Library Content
[41]
 Rollo pp. 59-60. Management System

[42]
 Id. at 41-46.
Supreme Court E-Library
[43]
 Id. at 66-71.
[44]
 Id. at 42 43.
[45]
 Id. at 66-71.
 HI-LON MANUFACTURING, INC., PETITIONER, VS.
COMMISSION ON AUDIT, RESPONDENT.

D E C I S I O N

PERALTA, J.: 

This Petition for Certiorari under Rule 64, in relation to Rule 65

of the 1997 Rules of Civil Procedure, seeks to annul and set
aside the Commission on Audit (COA) Decision No. 2011-
003[1] dated January 20, 2011, which denied HI-LON
Manufacturing, Inc.'s (HI-LON) petition for review, and affirmed
with modification the Notice of Disallowance (ND) No. 2004-032
dated January 29, 2004 of COA's Legal and Adjudication Office-
National Legal and Adjudication Section (LAO-N). The LAO-N
disallowed the amount of P9,937,596.20, representing the
difference between the partial payment of P10,461,338.00 by
the Department of Public Works and Highways (DPWH) and the
auditor's valuation of P523/741.80, as just compensation for
the 29,690-square-meter road right-of-way taken by the
government in 1978 from the subject property with a total area
of 89,070 sq. m. supposedly owned by HI-LON. The dispositive
portion of the assailed COA Decision No. 2011-003 reads:
WHEREFORE, premises considered, the instant petition for
review is hereby DENIED for lack of merit. Accordingly, ND No.
2004-32 dated January 29, 2004 amounting to P9,937,596.20
is hereby AFFIRMED with modification on the reason thereof
that the claimant is not entitled thereto.
815 Phil. 60
On the other hand, the Special Audit Team constituted under
EN BANC COA Office Order No. 2009-494 dated July 16, 2009 is hereby
instructed to issue a ND for the P523,741.80 payment to Hi-Lon
[ G.R. No. 210669, August 01, 2017 ] not covered by ND No. 2004-032 without prejudice to the other
findings to be embodied in the special audit report.[2]
This Petition likewise assails COA's Decision[3] No. 2013-212
dated December 3, 2013 which denied HI-LON's motion for
reconsideration, affirmed with finality COA Decision No. 2011-
003, and required it to refund payment made by DPWH in the
amount of P10,461,338.00. The dispositive portion of the
assailed COA Decision No. 2013-212 reads:
WHEREFORE, the instant Motion for Reconsideration is
hereby DENIED for lack of merit. Accordingly, Commission on
Audit Decision No. 2011-003 dated January 20, 2011 is
hereby AFFIRMED WITH FINALITY. Hi-Lon Manufacturing
Co., Inc. is hereby required to refund the payment made by the
Department of Public Works and Highways in the amount of
P10,461,338.00.[4]
The antecedent facts are as follows:
Sometime in 1978, the government, through the then Ministry
of Public Works and Highways (now DPWH), converted to a road
right-of-way (RROW) a 29,690 sq. m. portion of the 89,070 sq.
m. parcel of land (subject property) located in Mayapa,
Calamba, Laguna, for the Manila South Expressway Extension
Project. The subject property was registered in the name of
Commercial and Industrial Real Estate Corporation (CIREC)
under Transfer Certificate of Title (TCT) No. T-40999.
Later on, Philippine Polymide Industrial Corporation (PPIC)
acquired the subject property, which led to the cancellation of
TCT No. T-40999 and the issuance of TCT No. T-120988 under
its name. PPIC then mortgaged the subject property with the
Development Bank of the Philippines (DBP), a government
financing institution, which later acquired the property in a
foreclosure proceeding on September 6, 1985. TCT No. T-
120988, under PPIC's name, was then cancelled, and TCT No.
T-151837 was issued in favor of DBP.
Despite the use of the 29,690 sq. m. portion of the property as
RROW, the government neither annotated its claim or lien on
the titles of CIREC, PPIC and DBP nor initiated expropriation
proceedings, much less paid just compensation to the registered
owners.
Upon issuance of Administrative Order No. 14 dated February
3, 1987, entitled "Approving the Identification of and Transfer to
the National Government of Certain Assets and Liabilities of the
Development Bank of the Philippines and the Philippine
National Bank," the DBP submitted all its acquired assets,
including the subject property, to the Asset Privatization Trust
(APT) for disposal, pursuant to Proclamation No. 50 dated 8
December 1986.
On June 30, 1987, APT disposed of a portion of the subject
property in a public bidding. The Abstract of Bids[5] indicated
that Fibertex Corporation (Fibertex), through Ester H. Tanco,
submitted a P154,000,000.00 bid for the asset formerly
belonging to PPIC located in Calamba, Laguna, i.e., "Land (5.9
hectares) TCT 4099, buildings & improvements, whole mill,"
while TNC Philippines, Inc. and P. Lim Investment, Inc.
submitted a bid of P106,666,000.00 and P138,000,000.00,
respectively. With respect to the former assets of Texfiber
Corporation (Texfiber) in Taytay, Rizal i.e., "Land (214,062 sq.
m. TCT (493917) 506665, buildings & improvements, whole
mill"), only Fibertex submitted a bid of P210,000,000.00.
In a Certification[6] dated July 1, 1987, APT certified that
Fibertex was the highest bidder of PPIC and Texfiber assets for
P370,000,000.00, and recommended to the Committee on
Privatization to award said assets to Fibertex. In a Letter[7] dated
November 10, 1988, APT certified that Fibertex paid APT
P370,000,000.00 for the purchase of the said assets formerly
belonging to PPIC and Texfiber.
Meanwhile, Fibertex allegedly requested APT to exclude
separate deeds of sale for the parcel of land and for
improvements under the subject property covered by TCT No.
151837 in the name of DBP. Having been paid the full bid
amount, APT supposedly agreed with Fibertex that the land
would be registered in the name of TG Property, Inc. (TGPI) and
the improvements to Fibertex. Thus, APT executed two (2)
separate Deeds of Sale with TGPI and Fibertex with regard to
the property, namely:
a. Deed of Sale between APT and TGPI executed on October
29, 1987 for the sale of a parcel of land covered by TCT
No. T-151837 for a consideration of P2,222,967.00.
b. Deed of Sale between APT and Fibertex executed on 19
August 1987 for the sale of improvements (machinery,
equipment and other properties) on the same property
for a consideration of P154,315,615.39.
Upon complete submission of the required documents and proof
of tax payments on December 9, 1987, the Register of Deeds of
Calamba, Laguna, cancelled DBP's TCT No. 151837 and issued
TCT No. T-158786 in the name of TGPI, covering the entire
89,070 sq. m. subject property, including the 29,690 sq. m.
RROW. From 1987 to 1996, TGPI had paid real property taxes
for the entire 89,070 sq. m. property, as shown by the Tax
Declarations and the Official Receipt issued by the City
Assessor's Office and Office of the City Treasurer of Calamba,
Laguna, respectively.
On April 16, 1995, TGPI executed a Deed of Absolute Sale in
favor of HI-LON over the entire 89,070 sq. m. subject property
for a consideration of P44,535,000.00. HI-LON registered the
Deed with the Register of Deeds of Calamba, Laguna, which
issued in its name TCT No. 383819.
Sometime in 1998, Rupert P. Quijano, Attorney-in-Fact of HI-
LON, requested assistance from the Urban Road Project Office
(URPO) DPWH for payment of just compensation for the 29,690
sq. m. portion of the subject property converted to a RROW. The
DPWH created an Ad HocCommittee which valued the RROW at
P2,500/sq. m. based on the 1999 Bureau of/ Internal Revenue
(BIR) zonal valuation.
On December 21, 2001, a Deed of Sale was executed between
HI-LON and the Republic of the Philippines, represented by
Lope S. Adriano, URPO-PMO Director, by authority of the
DPWH Secretary, covering the 29,690 sq. m. parcel of land
converted to RROW for a total consideration of P67,492,500.00.
On January 23, 2002, the Republic, through the DPWH, made
the first partial payment to HI-LON in the amount of
P10,461,338.00.
On post audit, the Supervising Auditor of the DPWH issued
Audit Observation Memorandum No. NGS VIII-A-03-001 dated
April 2, 2003 which noted that the use of the 1999 zonal
valuation of P2,500.00/sq. m. as basis for the determination of
just compensation was unrealistic, considering that as of said
year, the value of the subject property had already been
"glossed over by the consequential benefits" it has obtained
from the years of having been used as RROW. The auditor
pointed out that the just compensation should be based on the
value of said property at the time of its actual taking in 1978.
Taking into account the average value between the 1978 and
1980 Tax Declarations covering the subject land, the Auditor
arrived at the amount of P19.40/sq. m. as reasonable
compensation and, thus, recommended the recovery of excess
payments.
Upon review of the auditor's observations, the Director of the
LAO-N issued on January 29, 2004 ND No. 2004-32 in the
amount of P9,937,596.20, representing the difference between
the partial payment of P10,461,338.00 to HI-LON and the
amount of P532.741.80, which should have been paid as just
compensation for the conversion of the RROW.
Acting on the request of Dir. Lope S. Adriano, Project Director
(URPO-PMO) for the lifting of ND No. 2004-032 dated January
29, 2004, the LAO-N rendered Decision No. 2004-172 dated
May 12, 2004, affirming the same ND, and stating the value of
the property must be computed from the time of the actual
taking.
Resolving (1) the motions for reconsideration and request for
exclusion from liability of former DPWH Secretary Gregorio R.
Vigilar, et al. (2) the request for lifting, of Notice of Disallowance
No. 2004-032 of OIC Director Leonora J. Cuenca; (3) the motion
to lift the disallowance and/or exclusion as person liable of Ms.
Teresita S. de Vera, Head, Accounting Unit, DPWH; and (4) the
appeal from ND No. 2004-032 of former Assistant Secretary Joel
C. Altea and of Mr. Rupert P. Quijano, Attorney-in-Fact of HI-
LON, the LAO-N issued Decision No. 2008-172-A dated June
25, 2008, which denied the appeal and affirmed the same ND
with modification that payment of interest is appropriate under
the circumstances.
Aggrieved, HI-LON filed a petition for review before the COA. In
its regular meeting on June 9, 2009, the COA deferred the
resolution of the petition, and instructed its Legal Service
Section to create a Special Audit Team from the Fraud Audit
and Investigation Office to investigate and validate HI-LON's
claim.
In its assailed Decision No. 2011-003 dated January 20, 2011,
the COA denied for lack of merit HI-LON's petition for review of
the LAO-N Decision No. 2008-172-A, and affirmed ND No.
2004-032 dated July 29, 2004 with modification declaring the
claimant not entitled to just compensation. The COA also
instructed the Special Audit Team to issue an ND for the
P523,741.80 payment to HI-LON not covered by ND No. 2004-
032, without prejudice to the other findings embodied by the
special audit report.
On the issue of whether or not HI-LON is entitled to just
compensation for the 29,690 sq. m. portion of the subject
property, the COA found that the evidence gathered by the
Special Audit Team are fatal to the claim for such
compensation.
First, the COA noted that the transfer of the subject property in
favor of TGPI, the parent corporation of HI-LON, was tainted
with anomalies because records show that TGPI did not
participate in the public bidding held on June 30, 1987, as only
three (3) bidders participated, namely: Fibertex Corporation,
TNC Philippines, Inc., and P. Lim Investment, Inc.
Second, the COA pointed out that the Deed of Sale between APT
and Fibertex has a disclosure that "The subject of this Deed of
Absolute Sale, therefore, as fully disclosed in the APT Asset
Catalogue, is the total useable area of 59,380 sq.
m.,"[8] excluding for the purpose the 29,690 sq. m. converted to
RROW. The COA added that such exclusion was corroborated
by the Abstract of Bids duly signed by the then APT Executive
Assistant and Associate Executive Trustee, showing that the
land covered by TCT No. T-151387 was offered to the public
bidding for its useable portion of 5.9 hectares only, excluding
the subject 29,690 sq. m. converted to RROW.
Third, the COA observed that HI-LON is a mere subsidiary
corporation which cannot acquire better title than its parent
corporation TGPI. The COA stressed that for more than (7)
seven years that the subject property was under the name of
TGPI from its registration on December 9, 1987 until it was
transferred to HI-LON on April 16, 1995, TGPI did not attempt
to file a claim for just compensation because it was estopped to
do so as the Deed of Sale executed between APT and TGPI
clearly stated that the 29,690 sq. m. RROW was excluded from
the sale and remains a government property. Applying the
principle of piercing the veil of corporate fiction since TGPI owns
99.9% of HI-LON, the COA ruled that HI-LON cannot claim
ignorance that the 29,690 sq. m. RROW was excluded from the
public auction.
Having determined that HI-LON or its predecessor-in-interest
TGPI does not own the RROW in question, as it has been the
property of the Republic of the Philippines since its acquisition
by the DBP up to the present, the COA concluded that the
proper valuation of the claim for just compensation is irrelevant
as HI-LON is not entitled thereto in the first place.
Dissatisfied, HI-LON filed a Motion for Reconsideration of COA
Decision No. 2011-003 and a Supplement thereto.
On December 3, 2013, the COA issued the assailed Decision
No. 2013-212 denying HI-LON's motion, for reconsideration,
affirming with finality its assailed Decision No. 2011-003, and
requiring HI-LON to refund the payment made by DPWH in the
amount of P10,461,338.00.
In this Petition for Certiorari, HI-LON argues that the COA
committed grave abuse of discretion, amounting to lack or
excess of jurisdiction when it held (1) that there was no property
owned by HI-LON that was taken by the government for public
use; (2) that the 89,070-sq. m. subject parcel of land, including
the 29,690 sq. m. portion used as RROW by the government,
had been the property of the Republic of the Philippines; (3) that
HI-LON is not entitled to payment of just compensation; and (4)
that it collaterally attacked HI-LON's ownership of the subject
land, including the RROW.[9]
The Office of the Solicitor General (OSG) counters that the COA
acted within its jurisdiction when it evaluated and eventually
disallowed what it found to be an irregular, anomalous and
unnecessary disbursement of public funds. The OSG agrees
with the COA that HI-LON is not entitled to payment of just
compensation because the 29,690 sq. m. portion used as RROW
is already owned by the Republic since 1987 when DBP
transferred the entire 89,070 sq. m. subject property to APT,
pursuant to Administrative Order No. 14. The OSG emphasizes
that the Deed of Absolute Sale dated October 29, 1987 between
the Republic (through APT) and TGPI clearly stated that the
subject thereof, as fully disclosed in the APT Asset Specific
Catalogue, is the total useable area of 59,380 sq. m., hence, the
29,690 sq. m. portion used as RROW was expressly excluded
from the sale. Besides, the OSG notes that the COA aptly found
that there were only three bidders who participated in APT's
public bidding of the subject property and TGPI was not one of
the bidders. There being an anomaly in the transfer of the
property from APT to TGPI, the OSG posits that HI-LON, as
TGPI's successor-in-interest, is not entitled to just
compensation.
Stating that the intention of Proclamation No. 50 was to
transfer the non-performing assets of DBP to the national
government, the OSG maintains that APT has no authority to
offer for sale the said portion because it is a performing asset,
having been used by the government as RROW for the Manila
South Expressway since 1978. Considering that the said 29,690
sq. m. portion was not sold and transferred by APT to TGPI, the
OSG submits that TGPI cannot also transfer the same portion
to its subsidiary, HI-LON. The OSG concludes that HI-LON is
not entitled to payment of just compensation as it is not the
owner of the said portion, and that the COA properly ordered
full disallowance of the P10,461,338.00 paid to HI-LON.
HI-LON's Petition for HI-LON is devoid of merit.
In support of its claim of entitlement to just compensation, HI-
LON relies on the Deed of Sale dated October 29, 1987, and
insists that its predecessor-in-interest (TGPI) acquired from the
national government, through APT, the entire 89,070 sq. m.
property, which was previously registered in the name of DBP
under TCT No. 151837. HI-LON asserts that the 29,690 sq. m.
RROW was not excluded from the sale because: (1) APT referred
to the entire property in the Whereas Clauses as one of the
subject of the sale; (2) APT made an express warranty in the
said Deed that the properties sold are clear of liens and
encumbrances, which discounts the need to investigate on the
real status of the subject property; and (3) the title registered in
the name of DBP, as well as the titles of the previous owners,
CIREC and PPIC, contains no annotation as regards any
government's claim over the RROW.
HI-LON's assertions are contradicted by the clear and
unequivocal terms of the Deed of Sale[10] dated 29 October 1987
between APT and TGPI, which state that the subject thereof is
the total usable area of 59,380 sq. m. of the subject property.
Contrary to HI-LON's claim, nothing in the Whereas Clauses of
the Deed indicates that the object of the sale is the entire
89,070 sq. m. property, considering that the 29,690 sq. m.
portion thereof had been used as road right-of-way (RROW) for
the South Expressway, to wit:
xxxx
WHEREAS, the Development Bank of the Philippines (DBP) was
the mortgagee of a parcel of land (hereafter to be referred to as
the "PROPERTY") covered by Transfer Certificate of Title No. T-
151837 of the Registry of Deeds for the Province of Laguna
(Calamba Branch), more particularly described as follows:
A parcel of land (Lot 2-D-I-J of the subd. Plan Psd-39402, being
a portion-of Lot 2-D-l, described on plan Psd-18888, LRC
(GLRO Rec:No. 9933, situated in the Bo. of Mayapa & San
Cristobal, Municipality of Calamba, Province of Laguna.
Bounded on the N.E. by Lot No. 2-D-1-1; of the subd. Plan; on
the S., by the Provincial Road; on the SW., by Lot 2-D-l-K of the
subd. plan and on the NW., by Lot No. 2-B of plan Psd-925.
Beginning at a point marked "1" on plan, being S. 62 deg.
03'W., 1946.22 from L.M. 5, Calamba Estate; Thence — N. 64
deg. 35'E., 200.27 m. to point 2; S.21 deg. 03'E. 166.82 m. to
point 3; S. 12 deg. 30'E, 141.01 m. to point 4; S. 10 deg. 25'E,
168.29 m. to point 5; N. 84 deg. 47'W, 215.01 m. to point 6; N.
13 deg. 44'W., 150.99 m. Thence — to point 7; N. 13 deg. 45'W.,
27.66 m. to the point of beginning; containing an area of
EIGHTY-NINE THOUSAND SEVENTY (89,070) SQUARE
METERS, more or less. All points referred to are indicated on
the plan and are marked on the ground by PLS. cyl. cone.
mons. bearings true detloop deg. 03'E., date of original survey
Jan. 1906 - Jan. 1908 and Sept. 1913 and that of subd. survey,
Aug. 23-25, 1953.
[As per Tax Declaration No. 9114, an area of 29,690 sq. m. had
been used (road-right-of-way) for the South Expressway. The
subject of this Deed of Absolute Sale, therefore, as fully
disclosed in the APT Asset Specific Catalogue, is the total
useable area of 59,380 sq. m.][11]
WHEREAS, the PROPERTY was subsequently acquired by DBP
at public auction in a foreclosure sale as evidenced by a Sheriffs
Certificate of Sale dated September 6, 1985 issued by Mr.
Godofredo E. Quiling, Deputy Provincial Sheriff, Office of the
Provincial Sheriff of Laguna, Philippines. x x x
WHEREAS, pursuant to Administrative Order No. 14 issued on
February 3, 1987 [Approving the Identification of and Transfer
to the National Government of Certain Assets and Liabilities of
the Development Bank of the Philippines and the Philippine
National Bank], DBP's ownership and interest over the
PROPERTY were transferred to the National Government
through the ASSET PRIVATIZATION TRUST (APT), a public trust
created under Proclamation No. 50 dated December 8, 1986.
WHEREAS, in the public bidding conducted by the APT on June
30, 1987, the VENDEE [TGPI] made the highest cash bid for the
PROPERTY and was declared the winning bidder.
WHEREAS, the sale of the PROPERTY has been authorized by
the COMMITTEE ON PRIVATIZATION under Notice of Approval
dated July 21, 1987 of the APT;
WHEREAS, the VENDEE [TGPI] has fully paid the VENDOR
[Government of the Republic of the Philippines, through APT]
the purchase price of the PROPERTY in the amount of PESOS:
TWO MILLION TWO HUNDRED TWENTY-TWO THOUSAND
NINE HUNDRED SIXTY-SEVEN (P2,222,967.00).
NOW, THEREFORE, for and in consideration of the above
premises and for the sum of PESOS: TWO MILLION TWO
HUNDRED TWENTY-TWO THOUSAND NINE HUNDRED SIXTY-
SEVEN (P2,222,967.00), Philippine Currency, paid by the
VENDEE to the VENDOR, the VENDOR does by these presents
sell, transfer and convey the PROPERTY hereinabove described
unto the VENDEE, its successors and assigns, subject to the
following conditions:
1. The VENDOR hereby warrant that the PROPERTIES shall be
sold and transferred free and clear of liens and encumbrances
accruing before August 18, 1987, and that all taxes or charges
accruing or becoming due on the PROPERTIES before said date
have or shall be fully paid by the VENDOR;
2. Documentary Stamp Taxes, Transfer Taxes. Registration fees,
and all other expenses arising out of or relating to the execution
and delivery of this Deed shall be for the account of and paid by
the VENDEE;
3. Capital gains tax, if any, payable on or in respect of the
transfer of the PROPERTY to the VENDEE shall be for the
account of and paid by the VENDOR.
IN WITNESS WHEREOF, the parties hereto have caused these
presents to be signed at Makati, Metro Manila this [29th] day of
[October], 1987.[12]
As the Deed of Sale dated October 29, 1987 is very specific that
the object of the sale is the 59,380. sq. m. portion of the subject
property, HI-LON cannot insist to have acquired more than
what its predecessor-in-interest (TGPI) acquired from APT.
Article 1370 of the New Civil Code provides that if the terms of a
contract are clear and leave no doubt upon the intention of the
contracting parties, the literal meaning of its stipulations shall
control. Every contracting party is presumed to know the
contents of the contract before signing and delivering it,[13] and
that the words used therein embody the will of the parties.
Where the terms of the contract are simple and clearly
appears.to have been executed with all the solemnities of the
law, clear and convincing evidence is required to impugn it.
[14]
 Perforce, HI-LON's bare allegation that the object of the Deed
of Sale is the entire 89,070 sq. m. area of the subject property,
is self-serving and deserves short shrift.
The Court thus agrees with the COA in rejecting HI-LON's claim
of ownership over the 29,690 sq. m. RROW portion of the
subject property in this wise:
xxxx
As clearly shown in the Abstract of Bids, the subject of the
bidding was 59,380 sq. m. only. The Deed of Sale expressly
states that -
[As per Tax Declaration No. 9114, an area of 29,690 sq. m. had
been used (road-right-of-way) for the South Expressway. The
subject of this Deed of Absolute Sale, therefore, as fully
disclosed in the APT Asset Specific Catalogue, is the total
useablc area of 59,380 sq. m.]
The government cannot enter into a contract with the highest
bidder and incorporate substantial provisions beneficial to the
latter which are not included or contemplated in the terms and
specifications upon which the bids were solicited. It is contrary
to the very concept of public bidding to permit an inconsistency
between the terms and conditions under which the bids were
solicited and those under which the bids were solicited and
those under which proposals are submitted and accepted.
Moreover, the substantive amendment of the terms and
conditions of the contract bid out, after the bidding process had
been concluded, is violative of the principles in public bidding
and will render the government vulnerable to the complaints
from the losing bidders.
Thus, since the area of [29,690 sq. m. which later became]
26,997 sq. m. covered by the ROW was not subject of the public
bidding, Hi-Lon cannot validly acquire and own the same. The
owner of this property is still the Republic of the Philippines.
x x x x[15]
Citing Bagatsing v. Committee on Privatization[16] where it was
held that Proclamation No. 50 does not prohibit APT from
selling and disposing other kinds of assets whether they are
performing or non-performing, necessary or appropriate, HI-
LON contends that regardless of whether or not the RROW is a
performing or non-performing asset, it could not have been
excluded in the sale of the entire 89,070 sq. m. property
pursuant to the said Proclamation.
Concededly, the 29,690 sq. m. portion of the subject property is
not just an ordinary asset, but is being used as a RROW for the
Manila South Expressway Extension Project, a road devoted for
a public use since it was taken in 1978. Under the Philippine
Highway Act of 1953, "right-of-way" is defined as the land
secured and reserved to the public for highway purposes,
whereas "highway" includes rights-of-way, bridges, ferries,
drainage structures, signs, guard rails, and protective
structures in connection with highways.[17] Article 420 of the
New Civil Code considers as property of public dominion those
intended for public use, such as roads, canals, torrents, ports
and bridges constructed by the state, banks, shores,
roadsteads, and others of similar character.
Being of similar character as roads for public use, a road right-
of-way (RROW) can be considered as a property of public
dominion, which is outside the commerce of man, and cannot
be leased, donated, sold, or be the object of a contract,[18] except
insofar as they may be the object of repairs or improvements
and other incidental matters. However, this RROW must be
differentiated from the concept of easement of right of way
under Article 649[19] of the same Code, which merely gives the
holder of the easement an incorporeal interest on the property
but grants no title thereto,[20] inasmuch as the owner of the
servient estate retains ownership of the portion on which the
easement is established, and may use the same in such a
manner as not to affect the exercise of the easement.[21]
As a property of public dominion akin to a public thoroughfare,
a RROW cannot be registered in the name of private persons
under the Land Registration Law and be the subject of a
Torrens Title; and if erroneously included in a Torrens Title, the
land involved remains as such a property of public dominion.
[22]
 In Manila International Airport Authority v. Court of Appeals,
[23]
 the Court declared that properties of public dominion, being
for public use, are not subject to levy, encumbrance or
disposition through public or private sale. "Any encumbrance,
levy on execution or auction sale of any property of public
dominion is void for being contrary to public policy. Essential
public services will stop if properties of public dominion are
subject to encumbrances, foreclosures and auction sale."[24]
It is, therefore, inconceivable that the government, through APT,
would even sell in a public bidding the 29,690 sq. m. portion of
the subject property, as long as the RROW remains as property
for public use. Hence, HI-LON's contention that the RROW is
included in the Deed of Absolute Sale dated 29 October 1987,
regardless whether the property is a performing or non-
performing asset, has no legal basis.
Neither can HI-LON harp on the express warranty in the Deed
of Sale that the subject property is clear from any
encumbrance, and the lack of annotation of the government's
claim of RROW on the TCTs of CIREC, PPIC and DBP covering
the subject property, to bolster its claim of having acquired
ownership of such property in good faith.
There is no dispute as to the finding of COA Commissioner
Juanito G. Espino and DPWH Officer-in-Charge Manuel M.
Bonoan based on the examination of land titles of the subject
property that the entire 89,070 sq. m. area thereof was never
reduced in the process of seven (7) transfers of ownership from
Emerito Banatin, et al., in 1971 to HI-LON in 1996, nor was
there an annotation of a RROW encumbrance on the TCTs of
CIREC, PPIC, DBP and TGPI. Be that as it may, HI-LON cannot
overlook the fact that the RROW was taken upon the directive of
the Ministry of Public Works and Highways in 1978 for the
construction of the Manila South Expressway Extension project.
Such public highway constitutes as a statutory lien on the said
TCTs, pursuant to Section 39 of the Land Registration Act (Act
No. 496) and Section 44 of the Property Registration Decree
(Presidential Decree No. 1529):
Section 39. Every applicant receiving a certificate of title in
pursuance of a decree of registration, and every subsequent
purchaser of registered land who takes a certificate of title for
value in good faith, shall hold the same free of all encumbrance
except those noted on said certificate, and any of the following
encumbrances which may be subsisting, namely:
First. Liens, claims, or rights arising or existing under the laws
or Constitution of the United States or of the Philippine Islands
which the statutes of the Philippine Islands cannot require to
appear of record in the registry.
Second. Taxes within two years after the same have become due
and payable.
Third. Any public highway, way, or private way established by
law, where the certificate of title does not state that the
boundaries of such highway or way have been determined.
But if there are easements or other rights appurtenant to a
parcel of registered land which for any reason have failed to be
registered, such easements or rights shall remain so
appurtenant notwithstanding such failure, and shall be held to
pass with the land until cut off or extinguished by the
registration of the servient estate, or in any other manner.
xxxx
SECTION 44. Statutory Liens Affecting Title. — Every registered
owner receiving a certificate of title in pursuance of a decree of
registration, and every subsequent purchaser of registered land
taking a certificate of title for value and in good faith, shall hold
the same free from all encumbrances except those noted in said
certificate and any of the following encumbrances which maybe
subsisting, namely:
First. Liens, claims or rights arising or existing under the laws
and Constitution of the Philippines which are not by law
required to appear of record in the Registry of Deeds in order to
be valid against subsequent purchasers or encumbrancers of
record.
Second. Unpaid real estate taxes levied and assessed within two
years immediately preceding the acquisition of any right over
the land by an innocent purchaser for value, without prejudice
to the right of the government to collect taxes payable before
that period from the delinquent taxpayer alone.
Third. Any public highway or private way established or
recognized by law, or any government irrigation canal or lateral
thereof, if the certificate of title docs not state that the
boundaries of such highway or irrigation canal or lateral
thereof have been determined.
Fourth. Any disposition of the property or limitation on the use
thereof by virtue of, or pursuant to, Presidential Decree No. 27
or any other law or regulations on agrarian reform.[25]
Section 39 of Act No. 496 and Section 44 of P.D. No. 1529
provide for statutory liens which subsist and bind the whole
world, even without the benefit of registration under the Torrens
System. Thus, even if the TCTs of CIREC, PPIC, DBP and TGPI
contain no annotation of such encumbrance, HI-LON can
hardly feign lack of notice of the government's claim of
ownership over the public highway built along the RROW, and
claim to be an innocent purchaser for value of the entire 89,070
sq. m. subject property because such highway prompts actual
notice of a possible claim of the government on the RROW.
Given that prospective buyers dealing with registered lands are
normally not required by law to inquire further than what
appears on the face of the TCTs on file with the Register of
Deeds, it is equally settled that purchasers cannot close their
eyes to known facts that should have put a reasonable person
on guard.[26] Their mere refusal to face up to that possibility will
not make them innocent purchasers for value, if it later
becomes apparent that the title was defective, and that they
would have discovered the fact, had they acted with the
measure of precaution required of a prudent person in a like
situation.[27] Having actual notice of a public highway built on
the RROW portion of the subject property, HI-LON cannot afford
to ignore the possible claim of encumbrance thereon by the
government, much less fail to inquire into the status of such
property.
Invoking the principle of estoppel by laches, HI-LON posits that
the government's failure to assert its right of ownership over the
RROW by registering its claim on the titles of CIREC, PPIC, and
DBP since the 29,690 sq. m. portion of the property was
converted to a RROW way back in 1978 until the purported sale
of the entire 89,070 sq. m. property to TGPI in 1987, bars it
from claiming ownership of the RROW because it slept over its
rights for almost nine (9) years. HI-LON states that if it were
true that the government was convinced that it acquired the
RROW, it would have lost no time in registering its claim before
the Register of Deeds, instead of surrendering to TGPI the
owner's duplicate of TCT No. 151837 in the name of DBP, to
facilitate the issuance of a new title over the entire 89,070 sq.
m. property, which includes the 29,690 sq. m. RROW. HI-LON
further claims that the government is estopped from claiming
its alleged right of ownership of the RROW because the DPWH
itself offered to buy and, in fact, executed a Deed of Sale,
thereby acknowledging that the RROW is a private property
owned by HI-LON.
The failure of the government to register its claim of RROW on
the titles of CIREC, PPIC, DBP and TGPI is not fatal to its cause.
Registration is the ministerial act by which a deed, contract, or
instrument is inscribed in the records of the Office of the
Register of Deeds and annotated on the back of the TCT
covering the land subject of the deed, contract, or instrument.
[28]
 It creates a constructive notice to the whole world and binds
third persons.[29] Nevertheless, HI-LON cannot invoke lack of
notice of the government's claim over the 29,690 sq. m. RROW
simply because it has actual notice of the public highway built
thereon, which constitutes as a statutory lien on its title even if
it is not inscribed on the titles of its predecessors-in-interest,
CIREC, PPIC, DBP, and TGPI. Indeed, actual notice is
equivalent to registration, because to hold otherwise would be
to tolerate fraud and the Torrens System cannot be used to
shield fraud.[30]
Meanwhile, the mistake of the government officials in offering to
buy the 29,690 sq. m. RROW does not bind the State, let alone
vest ownership of the property to HI-LON. As a rule, the State,
as represented by the government, is not estopped by the
mistakes or errors of its officials or agents, especially true when
the government's actions are sovereign in nature.[31] Even as
this rule admits of exceptions in the interest of justice and fair
play, none was shown to obtain in this case. Considering that
only 59,380 sq. m. of the subject property was expressly
conveyed and sold by the government (through APT) to HI-LON's
predecessor-in-interest (TGPI), HI-LON has no legal right to
claim ownership over the entire 89,070 sq. m. property, which
includes the 29,690 sq. m. RROW taken and devoted for public
use since 1978.
In arguing that the government had no legal title over the
RROW, HI-LON points out that the government acquired title
thereto only in 2001 when a Deed of Sale was executed between
HI-LON and the DPWH. HI-LON claims that when the
government used the 29,690 sq. m. portion of the subject
property as RROW in 1978, it never acquired legal title because
it did not institute any expropriation proceeding, let alone pay
the registered owner just compensation for the use thereof.
HI-LON's claim of ownership over the said RROW has been duly
rejected by the COA in this manner:
xxxx
By virtue of Administrative Order No. 14, s. 1987, pursuant to
Section 23 of Proclamation No. 50, the 89,070 sq. m. subject
parcel of land, including the 29,690 sq. m. which had been
used as ROW by the Government, was transferred to and owned
by the National Government. TG Property, Inc. cannot acquire a
portion of the parcel of land without authority and consent of
the Philippine Government, being the owner and seller of the
said property. Hi-Lon cannot even claim ownership on the
portion of the subject land without the said deed of sale
executed by the Government in favor of TG Property, Inc. The
facts would show that the ROW has been the property of the
Republic of the Philippines since its transfer from DBP in
1987.
x x x[32]
It bears emphasis that the right to claim just compensation for
the 29,690 sq. m. portion which was not exercised by CIREC or
PPIC, ceased to exist when DBP acquired the entire 89,070 sq.
m. property in a foreclosure sale and later transferred it to the
national government (through APT) in 1987, pursuant to
Proclamation No. 50. Having consolidated its title over the
entire property, there is no more need for the government to
initiate an action to determine just compensation for such
private property which it previously took for public
use sans expropriation proceedings.
Citing Section 48 of P.D. 1529 which bars collateral attack to
certificates of title, HI-LON asserts that COA erred in ruling that
there was no property owned by HI-LON that was taken by the
government for public use, despite the fact that: (a) the
ownership of the subject property was not raised before the
Commission Proper of the COA; and (b) COA has no jurisdiction
over issues of ownership and entitlement to just compensation.
HI-LON stresses that the titles issued to TGPI and HI-LON
conclusively show that they are the registered owners of the
entire 89,070 sq. m. property in Calamba, Laguna, including
the 29,690 sq. m. RROW. Absent any proceeding directly
assailing the said titles, the ownership of the said property by
HI-LON and TGPI is beyond dispute. HI-LON further states
that Leoncio Lee Tek Sheng v. Court of Appeal[33] cited by the
OSG is inapplicable because a notice of lis pendens was
annotated on the title subject of the case, unlike the titles of
TGPI and HI-LON which contain no annotation of claims of
ownership by the Republic.
Suffice it to state that there is no merit in HI-LON's argument
that the TCTs issued in its name and that of its predecessor-in-
interest (TGPI) have become incontrovertible and indefeasible,
and can no longer be altered, cancelled or modified or subject to
any collateral attack after the expiration of one (1) year from the
date of entry of the decree of registration, pursuant to Section
32 of P.D. No. 1529. In Heirs of Clemente Ermac v. Heirs of
Vicente Ermac,[34] the Court clarified the foregoing principle, viz.:
x x x While it is true that Section 32 of PD 1529 provides that
the decree of registration becomes incontrovertible after a year,
it does not altogether deprive an aggrieved party of a remedy in
law. The acceptability of the Torrens System would be impaired,
if it is utilized to perpetuate fraud against the real owners.
Furthermore, ownership is not the same as a certificate of title.
Registering a piece of land under the Torrens System does not
create or vest title, because registration is not a mode of
acquiring ownership. A certificate of title is merely an evidence
of ownership or title over the particular property described
therein. Its issuance in favor of a particular person does not
foreclose the possibility that the real property may be co-owned
with persons not named in the certificate, or that it may be held
in trust for another person by the registered owner.[35]
In Lacbayan v. Samoy, Jr.,[36] the Court noted that what cannot
be collaterally attacked is the certificate of title, and not the title
itself:
x x x The certificate referred to is that document issued by the
Register of Deeds known as the TCT. In contrast, the title
referred to by law means ownership which is, more often than
not, represented by that document. x x x Title as a concept of
ownership should not be confused with the certificate of title as
evidence of such ownership although both are interchangeably
used.
In Mallilin, Jr. v. Castillo,[37] the Court defined collateral attack
on the title, as follows:
x x x When is an action an attack' on a title? It is when the
object of the action or proceeding is to nullify the title, and thus
challenge the judgment pursuant to which the title was decreed.
The attack is direct when the object of an action or proceeding
is to annul or set aside such judgment, or enjoin its
enforcement. On the other hand, the attack is indirect or
collateral when, in an action to obtain a different relief, an
attack on the judgment is nevertheless made as an incident
thereof.[38]
In this case, what is being assailed by the COA when it
sustained the Notice of Disallowance for payment of just
compensation is HI-LON's claim of ownership over the 29,690
sq. m. portion of the property, and not the TCT of TGPI from
which HI-LON derived its title. Granted that there is an error in
the registration of the entire 89,070 sq. m. subject property
previously in the name of TGPI under TCT No. 156786[39] and
currently in the name of HI-LON under TCT No. T-
383819[40] because the 29,690 sq. m. RROW portion belonging
to the government was mistakenly included, a judicial
pronouncement is still necessaiy in order to have said portion
excluded from the Torrens title.[41]
HI-LON's assertion that the titles issued to TGPI and HI-LON
conclusively show that they are the registered owners of the
entire 89,070 sq. m. property in Calamba, Laguna, including
the 29,690 sq. m. RROW is anathema to the purpose of the
Torrens System, which is intended to guarantee the integrity
and conclusiveness of the certificate of registration, but cannot
be used for the perpetration of fraud against the real owner of
the registered land.[42] On point is the case of Balangcad v.
Court of Appeals[43] where it was held that "the system merely
confirms ownership and does not create it. Certainly, it cannot
be used to divest the lawful owner of his title for the purpose of
transferring it to another who has not acquired it by any of the
modes allowed or recognized by law. Where such an erroneous
transfer is made, as in this case, the law presumes that no
registration has been made and so retains title in the real owner
of the land."
It is also not amiss to cite Ledesma v. Municipality of
Iloilo[44] where it was ruled that "if a person obtains title, under
the Torrens system, which includes, by mistake or oversight,
lands which cannot be registered under the Torrens system, he
does not, by virtue of said certificate alone, become the owner of
the land illegally included." Inasmuch as the inclusion of public
highways in the certificate of title under the Torrens system
does not thereby give to the holder of such certificate said
public highways,[45] the same holds true with respect to RROWs
which are of similar character as roads for public use.
Assuming arguendo that collateral attack of said titles are
allowed, HI-LON claims that its right of ownership of the subject
RROW can no longer be assailed by the COA because it never
questioned such right until after it denied the petition for
review. HI-LON notes that ND No. 2004-032 was issued and it
was denied payment of just compensation for the RROW solely
on the ground that such compensation should be based on the
value of the lot at the time of the actual taking by the
government in 1978. HI-LON avers that it was surprised to find
out that in the Decision dated 20 January 2011, the COA
Commission Proper assailed for the first time TGPI's and HI-
LON's right of ownership over the RROW, instead of merely
finding whether or not the valuation of the property should be
based on the value at the time of the taking in 1978 or the value
of the P2,500.00/sq. m.
HI-LON's arguments fail to persuade.
COA may delve into the question of ownership although this
was not an original ground for the issuance of the Notice of
Disallowance, but only the proper valuation of the just
compensation based on the date of actual taking of the
property. In Yap v. Commission on Audit,[46] the Court ruled that
"COA is not required to limit its review only to the grounds
relied upon by a government agency's auditor with respect to
disallowing certain disbursements of public funds. In
consonance with its general audit power, respondent COA is not
merely legally permitted, but is also duty-bound to make its
own assessment of the merits of the disallowed disbursement
and not simply restrict itself to reviewing the validity of the
ground relied upon by the auditor of the government agency
concerned. To hold otherwise would render the COA's vital
constitutional power unduly limited and thereby useless and
ineffective." Tasked to be vigilant and conscientious in
safeguarding the proper use of the government's, and ultimately
the people's property, the COA is endowed with enough latitude
to determine, prevent, and disallow irregular, unnecessary,
excessive, extravagant or unconscionable expenditures of
government funds.[47]
It is the policy of the Court to sustain the decisions of
administrative authorities, especially one that was
constitutionally created like herein respondent COA, not only
on the basis of the doctrine of separation of powers, but also of
their presumed expertise in the laws they are entrusted to
enforce.[48] Considering that findings of administrative agencies
are accorded not only respect but also finality when the decision
and order are not tainted with unfairness or arbitrariness
amounting to grave abuse of discretion, it is only when the COA
acted with such abuse of discretion that the Court entertains a
petition for certiorari under Rule 65 of the Rules of Court.[49]
Grave abuse of discretion implies such capricious and
whimsical exercise of judgment as is equivalent to lack of
jurisdiction or, in other words, the exercise of the power in an
arbitrary manner by reason of passion, prejudice, or personal
hostility;[50] and it must be so patent or gross as to amount to
an evasion of a positive duty or to a virtual refusal to perform
the duty enjoined or to act at all in contemplation of law. [51] No
grave abuse of discretion can be imputed against the COA when
it affirmed the Notice of Disallowance issued by the LAO-N in
line with its constitutional authority[52] and jurisdiction over
cases involving "disallowance of expenditures or uses of
government funds and properties found to be illegal, irregular,
unnecessary, excessive, extravagant or
unconscionable."[53] Having determined that HI-LON does, not
own the disputed RROW, the COA correctly ruled that HI-LON
is not entitled to payment of just compensation and must
accordingly refund the partial payment made by the DPWH in
the amount of P10,461,338.00. To stress, even if HI-LON is the
registered owner of the subject property under TCT No. T-
383819 with an area of 89,070 sq. m., the Deed of Absolute
Sale dated 29 October 1987 clearly shows that only the 59,380
sq. m. portion of the subject property, and not 29,690 sq. m.
portion used as RROW, was sold and conveyed by the
government (through APT) to HI-LON's immediate predecessor-
in-interest (TGPI).
In light of the foregoing disquisition, HI-LON's prayer for
issuance of Temporary Restraining Order and/or Writ of
Injunction must necessarily be denied for lack of clear and
unmistakable right over the disputed 29,690 sq. m. portion of
the subject property.
Lastly, from the finality of the Court's decision until full
payment, the total amount to be refunded by HI-LON shall earn
legal interest at the rate of six percent (6%) per annum,
pursuant to Bangko Sentral ng Pilipinas Monetary Board
Circular No. 799, Series of 2013, because such interest is
imposed by reason of the Court's decision and takes the nature
of a judicial debt.[54]
WHEREFORE, premises considered, the Petition
for Certiorari is DENIED for lack of merit, and the Commission
on Audit Decision No. 2011-003 dated January 20, 2011 and
Decision No. 2013-212 dated December 3, 2013 are AFFIRMED
with MODIFICATION that a legal interest of six percent
(6%) per annum from the finality of this Decision until fully
paid, is imposed on the amount of P10,461,338.00 that HI-LON
Manufacturing Co., Inc. is required to refund to the Department
of Public Works and Highways.
SO ORDERED.
Sereno, C. J., Carpio, Velasco, JR., Leonardo-De Castro,
Bersamin, Del Castillo, Mendoza, Perlas-Bernabe, Leonen,
Jardeleza,* Martires, Tijam, and Reyes, Jr., JJ., concur.
Caguioa, J., on leave.
NOTICE OF JUDGMENT
Sirs/Mesdames:
Please take notice that on August 1,
2017 a Decision/Resolution, copy attached herewith, was
rendered by the Supreme Court in the above-entitled case, the
original of which was received by this Office on September 5,
2017 at 9:00 a.m.
Very truly
yours,
(SGD)
FELIPA G.
BORLONGAN-
 ANAMA
  Clerk of Court [15]
 Rollo, Vol. 1, p. 232. (Emphasis in the original).
[16]
 G.R. No. 112399, July 14, 1995, 246 SCRA 334, 347.
*
 No part prior OSG action.
[17]
 Article 11, Section 3 (a) and (k), Republic Act No. 917.
 Signed by Chairman Reynaldo A. Villar, and Commissioners
[1]

Juanito G. Espino, Jr. and Evelyn R. Buenaventura. [18]

 Municipality of Cavite v. Rojas, 30 Phil. 602, 607 (1915).
[2]
 Rollo, p. 49.  Art. 649. The owner, or any person who by virtue of a real
[19]

right may cultivate or use any immovable, which is surrounded

 Signed by Chairperson Ma. Gracia M. Pulido Tan and
[3]
by other immovables pertaining to other persons and without
Commissioners Heidi L. Mendoza and Rowena V. Guanzon. adequate outlet to a public highway, is entitled to demand a
right of way through the neighboring estates, after payment of
[4]
 Rollo, p. 234. the proper indemnity.
[5]
 Rollo, p. 172. Should this easement be established in such a manner that its
use may be continuous for all the needs of the dominant estate,
[6]
 Id. at 173. establishing a permanent passage, the indemnity shall consist
of the value of the land occupied and the amount of the damage
[7]
 Id. at 176. caused to the servient estate.
[8]
 Id. at 47. In case the right of way is limited to the necessary passage for
the cultivation of the estate surrounded by others and for the
[9]
 Id. at 21. gathering of its crops through the servient estate without a
permanent way, the indemnity shall consist in the payment of
[10]
 Rollo, Vol. 1, pp. 188-191. the damage caused by such encumbrance.
[11]
 Emphasis and underscoring added. This easement is not compulsory if the isolation of the
immovable is due to the proprietor's own acts.
[12]
 Rollo, Vol. 1, pp. 188-190.
 Bogo-Medellin Milling Co., Inc. v. Court of Appeals, 455 Phil.
[20]

[13]
 Conde v. Court of Appeals, 204 Phil. 589, 597 (1982). 285, 300 (2003).

 Development Bank of the Philippines v. National

[14] [21]
 Article 630 of the New Civil Code.
Merchandising Corporation, 148-B Phil. 310, 331 (1971).
  Monsignor Acebedo v. Director of Lands, 150-A Phil. 806, 816
[22]
Phil. 162, 170 (2005).
(1972); Civil Code of the Philippines Annotated by Edgardo L.
Paras, Volume 2, p. 47 (2008). [38]
 Mallilin v. Castillo, supra, at 165.
[23]
 528 Phil. 181, 219 (2006). [39]
 Rollo, pp. 79-80. 
[24]
 MIAA v. Court of Appeals, supra. [40]
 Id. at 294-295.
[25]
 Emphasis added. [41]
 Zobel v. Mercado, 108 Phil. 240, 242 (1960).
[26]
 Spouses Domingo v. Reed, 513 Phil. 339, 341 (2005).  Balangcad v. Justice of the Court of Appeals, 5th Div., 283
[42]

Phil. 59, 65 (1992).

[27]
 Id.
[43]
 Supra.
 Tecklo v. Rural Bank of Pamplona, Inc., 635 Phil. 249, 259
[28]

(2010). [44]
 49 Phil. 769, 773 (1926).
[29]
 Id. [45]
 Ledesma v. Municipality of Iloilo, supra, at 774.
[30]
 Lavides v. Pre, 419 Phil. 665, 672 (2001). [46]
 633 Phil. 174 (2010).
[31]
 Heirs of Reyes v. Republic, 529 Phil. 510, 519-520 (2006).  Delos Santos v. Commission on Audit, 716 Phil. 322, 332
[47]

(2013).
 Rollo, Vol. 1, p. 232. (Underscoring in the original; emphasis
[32]

added). [48]
 Id. at 332-333.
[33]
 G.R. No. 115402, July 15, 1998, 292 SCRA 544. [49]
 Id. at 333.
[34]
 451 Phil. 368 (2003). (Citations omitted).  Malayang Manggagawa ng Stayfast Phils., Inc. v. NLRC, et
[50]

al., 716 Phil. 500, 517 (2013).

 Heirs of Clemente Ermac v. Heirs of Vicente Ermac, supra, at
[35]

376-377. (Citations omitted) [51]

 Reyna v. Commission on Audit, 657 Phil. 209, 236 (2011).
[36]
 661 Phil. 307, 317 (2011). [52]
 Section 2, Article IX-D of the 1987 Constitution states:
[37]
 389 Phil. 153 (2000), cited in Caraan v. Court of Appeals, 511 Section 2.(1) The Commission on Audit shall have the power,
authority and duty to examine, audit, and settles all
accounts pertaining to the revenue and receipts of, and
expenditures or uses of funds and property, owned or held
in trust by, or pertaining to, the Government, or any of its
subdivisions, agencies or instrumentalities, including
government-owned or controlled corporations with original
charters, and on post-audit basis: (a) constitutional bodies,
commissions and offices that have been granted fiscal
autonomy under this Constitution; (b) autonomous state
colleges and universities; (c) other government-owned or
controlled Corporations and their subsidiaries; and (d) such
nongovernmental entities receiving subsidy or equity, directly or
indirectly, from or through the Government, which are required
by law or the granting, institution to submit such audit as a
condition of subsidy or equity.
xxx
(2) The Commission shall have exclusive authority, subject to
the limitations in this Article, to define the scope of its audit
and examination, establish the techniques and methods
required therefor, and promulgate accounting and auditing
rules and regulations, including those for the prevention
and disallowance of irregular, unnecessary, excessive,
extravagant or unconscionable expenditures or uses of
government funds and properties. (Emphasis added)  tax premature.
 Section 1, Rule II, 2009 Revised Rules of Procedure of the
[53]
Commission on Audit.
 Secretary of the Department of Public Works and Highways v.
[54]
Spouses Tecson, G.R. No. 179334, April 21, 2015, 756 SCRA
389, 415; See also Nacar v. Gallery Frames, 716 Phil. 267
(2013).
814 Phil. 616
SECOND DIVISION
[ G.R. No. 197526, July 26, 2017 ]
CE LUZON GEOTHERMAL POWER COMPANY, INC.,
PETITIONER, COMMISSIONER
OF INTERNALREVENUE, RESPONDENT.
[G.R. No. 199676-77, July 26, 2017]
REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE
BUREAU OF INTERNAL REVENUE, PETITIONER, V. CE
LUZON GEOTHERMAL POWER COMPANY, INC.,
RESPONDENT.
DECISION
LEONEN, J.: 
The 120-day and 30-day reglementary periods under Section
112(C) of the National Internal Revenue Code are both
mandatory and jurisdictional. Non-compliance with these
periods renders a judicial claim for refund of creditable input
Before this Court are two (2) consolidated Petitions for Review
concerning the prescriptive period in filing judicial claims for
unutilized creditable input tax or input Value Added Tax (VAT).
The first Petition,[1] docketed as G.R. No. 197526, was filed by
CE Luzon Geothermal Power Company, Inc. (CE Luzon) against
the Commissioner of Internal Revenue. The second Petition,
[2]
 docketed as G.R. Nos. 199676-77, was instituted by the
Bureau of Internal Revenue, on behalf of the Republic of the Total [P]26,574,388.99[9]
Philippines, against CE Luzon.

CE Luzon is a domestic corporation engaged in the energy
industry.[3] It owns and operates the CE Luzon Geothermal
Power Plant, which generates power for sale to the Philippine
National Oil Company-Energy Development Corporation by
virtue of an energy conversion agreement.[4] CE Luzon is a VAT-
registered taxpayer with Tax Identification Number 003-924-
356-000.[5]
The sale of generated power by generation companies is a zero-
rated transaction under Section 6 of Republic Act No. 9136.[6]
Without waiting for the Commissioner of Internal Revenue to
act on its claim, or for the expiration of 120 days, CE Luzon
instituted before the Court of Tax Appeals a judicial claim for
refund of its first quarter unutilized creditable input tax on
March 30, 2005.[10] The petition was docketed as CTA Case No.
7180.[11]
Meanwhile, on June 24, 2005, CE Luzon received the
Commissioner of Internal Revenue's decision denying its claim
for refund of creditable input tax for the second quarter of 2003.
[12]

In the course of its operations, CE Luzon incurred unutilized

creditable input tax amounting to P26,574,388.99 for taxable
year 2003.[7] This amount was duly reflected in its amended
quarterly VAT returns.[8] CE Luzon then filed before the Bureau
of Internal Revenue an administrative claim for refund of its
unutilized creditable input tax as follows:
On June 30, 2005, CE Luzon filed before the Court of Tax
Appeals a judicial claim for refund of unutilized creditable input
tax for the second to fourth quarters of taxable year 2003.
[13]
 The petition was docketed as CTA Case No. 7279.[14]
The material dates are summarized below:

Unutilized
Date of Period of Date of Filing Expiration Date of Date of
Quarter Creditable Input
Filing Claim Administrative of 120 Receipt Filing of
Tax
Taxable Claim days of Petition
January Year 2003 Denial for Review
1st [P]4,785,234.70
20, 2005 of Claim
March January 20, May 20, March 30,
2th [P]4,568,458.49 1st quarter -
31, 2005 2005 2005 2005
June 7, June
3rd [P]7,455,413.97 June 30,
2005 2nd quarter May 31, 2005 - 24,
2005
June 7, 2005
4th [P]9,765,281.83
2005 October 5, June 30,
3rd quarter June 7, 2005 -
2005 2005
 October 5, June 30,
4th quarter June 7, 2005 - duly substantiated creditable input tax for taxable year 2003.[28]
2005 2005[15]
In his Answer,[16] the Commissioner of Internal Revenue
asserted, among others, that CE Luzon failed to comply with the
invoicing requirements under the law.[17]
In the Decision[18] dated April 21, 2009, the Court of Tax
Appeals Second Division partially granted CE Luzon's claim for
unutilized creditable input tax. It ruled that both the
administrative and judicial claims of CE Luzon were brought
within the two (2)-year prescriptive period.[19]However, the Court
of Tax Appeals Second Division disallowed the amount of
P3,084,874.35 to be refunded.[20] CE Luzon was only able to
substantiate P22,647,638.47 of its claim.[21] The Court of Tax
Appeals Second Division ordered the Commissioner of Internal
Revenue to issue a tax credit certificate or to refund CE Luzon
the amount of P22,647,63 8.47 representing CE Luzon's
creditable input tax for taxable year 2003.[22]
CE Luzon and the Commissioner of Internal Revenue both
moved for reconsideration.[23] In the Resolution[24] dated October
19, 2009, the Court of Tax Appeals Second Division denied both
motions for lack of merit.
CE Luzon and the Commissioner of Internal Revenue then filed
their respective Petitions for Review before the Court of Tax
Appeals En Banc. The Petitions were docketed as C.T.A. EB No.
553 and C.T.A. EB No. 554, respectively.[25]
In the Decision[26] dated July 20, 2010, the Court of Tax Appeals
En Banc partially granted CE Luzon's Petition for Review.[27] The
Court of Tax Appeals En Banc ordered the Commissioner of
Internal Revenue to issue a tax credit certificate or to refund CE
Luzon the amount of P23,489,514.64, representing CE Luzon's
However, on November 22, 2010, the Court of Tax Appeals En
Banc rendered an Amended Decision,[29] setting aside its
Decision dated July 20, 2010.[30] The Court of Tax Appeals En
Banc ruled that CE Luzon failed to observe the 120-day period
under Section 112(C) of the National Internal Revenue Code.
Hence, it was barred from claiming a refund of its input VAT for
taxable year 2003.[31] The Court of Tax Appeals En Banc held
that CE Luzon's judicial claims were prematurely filed.[32] CE
Luzon should have waited either for the Commissioner of
Internal Revenue to render a decision or for the 120-day period
to expire before instituting its judicial claim for refund: [33]
WHEREFORE, premises considered:
1) the Commissioner of Internal Revenue's "Motion for
Reconsideration" is hereby GRANTED. Accordingly, our
Decision dated July 20, 2010 in the above[-Jcaptioned case
is hereby RECALLED and SET ASIDE, and a new one is
hereby entered DISMISSING CE Luzon's Petition for Review
in C.T.A. EB No. 553 and GRANTING CIR's Petition for
Review in C.T.A. EB No. 554. Accordingly, the Decision dated
April 21, 2009 and Resolution dated October 19, 2009
rendered by the Former Second Division in C.T.A. CASE Nos.
7180 and 7279 are hereby REVERSED and SET ASIDE.
2) For being moot and academic, CE LUZON'S "Motion for
Partial Reconsideration" is hereby DENIED.
SO ORDERED.[34]
CE Luzon moved for partial reconsideration.[35] On June 27,
2011, the Court of Tax Appeals En Banc rendered a second
Amended Decision,[36] partially granting CE Luzon's claim for
unutilized creditable input tax but only for the second quarter
of taxable year 2003 and only up to the extent of
P3,764,386.47.[37] The Court of Tax Appeals En Banc relied
on Commissioner of Internal Revenue v. Aichi Forging Company
of Asia, Inc.[38] in partially granting the petition.
The Court of Tax Appeals En Banc found that CE Luzon's
judicial claim for refund of input tax for the second quarter of
2003 was timely filed.[39] However, the Court of Tax Appeals En
Banc disallowed P804,072.02 to be refunded because of CE
Luzon's non-compliance with the documentation and invoicing
requirements:[40]
WHEREFORE, premises considered, CE Luzon Geothermal
Power Company, Inc.'s "Motion for Reconsideration" is PARTLY
GRANTED. Accordingly, our Amended Decision dated November
22, 2010 only in so far as it dismissed CE Luzon Geothermal
Power Company, Inc.'s 2nd quarter claim, is hereby LIFTED and
SET ASIDE, and another one is hereby entered ordering the
Commissioner of Internal Revenue to REFUND or to ISSUE A
TAX CREDIT CERTIFICATE in favor of CE Luzon Geothermal
Power, Inc. in the reduced amount of THREE MILLION SEVEN
HUNDRED SIXTY FOUR THOUSAND THREE HUNDRED
EIGHTY SIX AND 47/100 PESOS (P3,764,386.47), representing
its unutilized input VAT for the second quarter of taxable year
2003.
SO ORDERED.[41]
On September 2, 2011, CE Luzon filed before this Court a
Petition for Review on Certiorari[42] challenging the second
Amended Decision dated June 27, 2011 of the Court of Tax
Appeals En Banc.[43] The Petition was docketed as G.R. No.
197526.[44]
On January 27, 2012, the Commissioner of Internal Revenue
filed a Petition for Review on Certiorari[45] assailing the second
Amended Decision dated June 27, 2011 and the Resolution
dated December 1, 2011 of the Court of Tax Appeals En
Banc[46] insofar as it granted CE Luzon's second quarter claim
for refund.[47] The Petition was docketed as G.R. Nos. 199676-
77.[48]
The Commissioner of Internal Revenue filed a Comment on the
Petition for Review[49] in G.R. No. 197526 on February 7, 2012.
On April 11, 2012, the Petitions were consolidated.[50]
In the Resolution dated August 1, 2012, CE Luzon was required
to file a comment on the Petition in G.R. Nos. 199676-77 and a
reply to the comment in G.R. No. 197526.[51]
On November 14, 2012, CE Luzon filed its Comment on the
Petition in G.R. Nos. 199676-77[52] and its Reply to the comment
on the Petition in GR.No. 197526.[53]
In the Resolution[54] dated June 26, 2013, this Court gave due
course to the petitions and required the parties to submit their
respective memoranda. Meanwhile, on July 19, 2013, CE Luzon
filed a Supplement to its Petition.[55]
The Commissioner of Internal Revenue filed his
Memorandum[56] on September 16, 2013 while CE Luzon filed
its Memorandum[57] on September 20, 2013.
In its Petition docketed as G.R. No. 197526, CE Luzon asserts
that its judicial claims for refund of input VAT attributable to its
zero-rated sales were timely filed.[58] Relying on Atlas
Consolidated Mining and Development Corporation v.
Commissioner of Internal Revenue,[59] CE Luzon argues that the
two (2)-year prescriptive period under Section 229 of the
National Internal Revenue Code[60] governs both the
administrative and judicial claims for refund of creditable input
tax.[61] CE Luzon contends that creditable input tax attributable
to zero-rated sales is excessively collected tax.[62]
CE Luzon asserts that since the prescriptive periods in Section
112(C) of the National Internal Revenue Code are merely
permissive, it should yield to Section 229.[63] Moreover, Section
112(C) does not state that a taxpayer is barred from filing a
judicial claim for non-compliance with the 120-day period.
[64]
 CE Luzon emphasizes that the doctrine in Atlas directly
addressed the correlation between Section 229 and Section
112(C) of the National Internal Revenue Code. Atlas stated that
a taxpayer seeking a refund of input VAT may invoke Section
229 because input VAT was an "erroneously collected national
internal revenue tax."[65] CE Luzon points out that Aichi never
established a binding rule regarding the prescriptive periods in
filing claims for refund of creditable input tax.[66]
Assuming that Aichi  correctly interpreted Section 112(C) of the
National Internal Revenue Code, CE Luzon states that it should
not be applied in this case because CE Luzon's claims for
refund were filed before Aichi's promulgation.[67] The prevailing
rule at the time when CE Luzon instituted its judicial claim for
refund was that both the administrative and judicial claims
should be filed within two (2) years from the date the tax is
paid.[68]
In any case, CE Luzon argues that the Commissioner of Internal
Revenue is estopped from assailing the timeliness of its judicial
claims.[69] The Commissioner of Internal Revenue categorically
stated in several of its rulings that taxpayers need not wait for
the expiration of 120 days before instituting a judicial claim for
refund of creditable input tax.[70] CE Luzon relies on the
following Bureau of Internal Revenue issuances: (1) Section
4.104-2, Revenue Regulations No. 7-95; (2) Revenue
Memorandum Circular No. 42-99; (3) Revenue Memorandum
Circular No. 42-2003, as amended by Revenue Memorandum
Circular No. 49-2003; (4) Revenue Memorandum Circular No.
29-2009; and (5) Bureau of Internal Revenue Ruling DA-489-
03.[71]
On the other hand, the Commissioner of Internal Revenue
argues that Sections 112(C) and 229 of the National Internal
Revenue Code need not be harmonized because they are clear
and explicit.[72] Laws should only be construed if they are
"ambiguous or doubtful in meaning."[73]Section 112(C) clearly
provides that in claims for refund of creditable input tax,
taxpayers can only elevate their judicial claim upon receipt of
the decision denying their administrative claim or upon the
lapse of 120 days.[74] Moreover, the tax covered in Section 112 is
different from the tax in Section 229. Section 112(C) covers
unutilized input tax. In contrast, Section 229 pertains to
national internal revenue tax that is erroneously or illegally
collected.[75]
The Commissioner of Internal Revenue further contends that
CE Luzon's reliance on Atlas is misplaced.[76] Atlas neither
directly nor indirectly raised the issue of prescriptive periods in
filing claims for refund of input VAT. In addition, Atlas was
decided under the old tax code.[77] The clear and categorical
precedent regarding the issue of prescriptive periods in refunds
of input VAT is Aichi.[78]
Although the Bureau of Internal Revenue has ruled that judicial
claims for refund of input VAT may be brought within the two
(2)-year period under Section 229, the Commissioner of Internal
Revenue asserts that the State cannot be estopped by the errors
or mistakes of its agents.[79]An erroneous construction does not
create a vested right on those who have relied on it. Taxpayers
can neither prevent the correction of the erroneous
interpretation nor excuse themselves from compliance.[80]
In the Petition docketed as G.R. No. 199676-77, the
Commissioner of Internal Revenue assails the June 27, 2011
Amended Decision and December 1, 2011 Resolution of the
Court of Tax Appeals En Banc insofar as it granted CE Luzon's
second quarter claim for refund of VAT for taxable year 2003.[81]
According to the Commissioner of Internal Revenue, taxpayers
should comply with the provisions of Sections 236, 110(A), 113,
and 114 of the National Internal Revenue Code when claiming a
refund of unutilized creditable input tax. They should also meet
the requirements enumerated under the relevant Bureau of
Internal Revenue regulations. Moreover, it must be proven that
the input tax being claimed is attributable to zero-rated sales.
[82]
 The Commissioner of Internal Revenue asserts that CE
Luzon failed to comply with these requirements.[83]
VAT and was not part of what was carried over to the
succeeding taxable quarters.[90] CE Luzon adds that the
Commissioner of Internal Revenue did not identify which
documents it failed to submit.[91]
This case presents two (2) issues for resolution:
First, whether CE Luzon Geothermal Power, Inc.'s judicial
claims for refund of input Value Added Tax for taxable year
2003 were filed within the prescriptive period;[92] and
Finally, whether CE Luzon Geothermal Power, Inc. is entitled to
the refund of input Value Added Tax for the second quarter of
taxable year 2003.[93] Subsumed in this issue is whether it has
substantiated this claim.[94]

On the other hand, CE Luzon argues that the Commissioner of I

Internal Revenue is estopped from questioning CE Luzon's non-
compliance with the documentation requirements under the
Excess input tax or creditable input tax is not an erroneously,
law. It points out that its administrative claim for input VAT for
excessively, or illegally collected tax.[95] Hence, it is Section
the second quarter of taxable year 2003 was denied by the
112(C) and not Section 229 of the National Internal Revenue
Commissioner of Internal Revenue based on the finding that CE
Code that governs claims for refund of creditable input tax.
Luzon presumptively opted to carry over its excess input tax to
the succeeding taxable quarters.[84]
The tax credit system allows a VAT-registered entity to "credit
against or subtract from the VAT charged on its sales or
CE Luzon further contends that non-submission of complete
outputs the VAT paid on its purchases, inputs and imports."[96]
documents is not fatal to a judicial claim for refund of input tax.
[85]
 The Court of Tax Appeals is not bound by the conclusions
and findings of the Bureau of Internal Revenue.[86] The VAT paid by a VAT-registered entity on its imports and
purchases of goods and services from another VAT-registered
entity refers to input tax.[97] On the other hand, output tax
Finally, CE Luzon asserts that it has proven its entitlement to a
refers to the VAT due on the sale of goods, properties, or
refund of input VAT for the second quarter of 2003.[87] First, its
services of a VAT-registered person.[98]
judicial claim for refund was timely filed.[88] Second, its sales
were effectively zero-rated transactions under Republic Act No.
9136.[89] Third, although it opted to carry over its excess input Ordinarily, VAT-registered entities are liable to pay excess
tax, its actual claim was deducted from the total excess input output tax if their input tax is less than their output tax at any
given taxable quarter. However, if the input tax is greater than
the output tax, VAT-registered persons can carry over the
excess input tax to the succeeding taxable quarter or quarters.
[99]
Nevertheless, if the excess input tax is attributable to zero-rated
or effectively zero-rated transactions, the excess input tax can
only be refunded to the taxpayer or credited against the
taxpayer's other national internal revenue tax. Availing any of
the two (2) options entail compliance with the procedure
outlined in Section 112,[100] not under Section 229, of the
National Internal Revenue Code.
Section 229 of the National Internal Revenue Code, in relation
to Section 204(C), pertains to the recovery of excessively,
erroneously, or illegally collected national internal revenue tax.
Sections 204(C) and 229 provide:
Section 204.  Authority of the Commissioner to Compromise,
Abate and Refund or Credit Taxes. - The Commissioner may -  The procedure outlined above provides that a claim for refund of
. . . .  excessively or erroneously collected taxes should be made
(C) Credit or refund taxes erroneously or illegally received or
penalties imposed without authority, refund the value of
internal revenue stamps when they are returned in good
condition by the purchaser, and, in his discretion, redeem or
change unused stamps that have been rendered unfit for use
and refund their value upon proof of destruction. No credit or
refund of taxes or penalties shall be allowed unless the taxpayer
files in writing with the Commissioner a claim for credit or
refund within two (2) years after the payment of the tax or
penalty: Provided, however, That a return filed showing an
overpayment shall be considered as a written claim for credit or
refund.
....
Section 229. Recovery of Tax 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 written 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.
within two (2) years from the date the taxes are paid. Both the
administrative and judicial claims should be brought within the
two (2)-year prescriptive period. Otherwise, they shall forever be
barred.[101] However, Section 229 presupposes that the taxes
sought to be refunded were wrongfully paid.[102]
It is unnecessary to construe and harmonize Sections 112(C)
and 229 of the National Internal Revenue Code. Excess input
tax or creditable input tax is not an excessively, erroneously, or
illegally collected tax because the taxpayer pays the proper
amount of input tax at the time it is collected.[103] That a VAT-
registered taxpayer incurs excess input tax does not mean that
it was wrongfully or erroneously paid. It simply means that the
input tax is greater than the output tax, entitling the taxpayer
to carry over the excess input tax to the succeeding taxable
quarters.[104] If the excess input tax is derived from zero-rated or
effectively zero-rated transactions, the taxpayer may either seek
a refund of the excess or apply the excess against its other
internal revenue tax.[105]
The distinction between "excess input tax" and "excessively
collected taxes" can be understood further by examining the
production process vis-a-vis the VAT system. In Commissioner
of Internal Revenue v. San Roque:[106]
The input VAT is not "excessively" collected as understood
under Section 229 because at the time the input VAT is
collected the amount paid is correct and proper. The input VAT
is a tax liability of, and legally paid by, a VAT-registered seller of
goods, properties or services used as input by another VAT-
registered person in the sale of his own goods, properties, or
services. This tax liability is true even if the seller passes on the
input VAT to the buyer as part of the purchase price. The
second VAT-registered person, who is not legally liable for the
input VAT, is the one who applies the input VAT as credit for
his own output VAT. If the input VAT is in fact "excessively"
collected as understood under Section 229, then it is the first
VAT-registered person — the taxpayer who is legally liable and
who is deemed to have legally paid for the input VAT — who can
ask for a tax refund or credit under Section 229 as an ordinary
refund or credit outside of the VAT System. In such event, the
second VAT-registered taxpayer will have no input VAT to offset
against his own output VAT.
In a claim for refund or credit of "excess" input VAT under
Section 110 (B) and Section 112 (A), the input VAT is not
"excessively" collected as understood under Section 229. At the
time of payment of the input VAT the amount paid is the correct
and proper amount. Under the VAT System, there is no claim or
issue that the input VAT is "excessively" collected, that is, that
the input VAT paid is more than what is legally due. The person
legally liable for the input VAT cannot claim that he overpaid
the input VAT by the mere existence of an "excess" input VAT.
The term "excess" input VAT simply means that the input VAT
available as credit exceeds the output VAT, not that the input
VAT is excessively collected because it is more than what is
legally due. Thus, the taxpayer who legally paid the input VAT
cannot claim for refund or credit of the input VAT as
"excessively" collected under Section 229.[107](Citations omitted,
emphasis supplied)
Considering that creditable input tax is not an excessively,
erroneously, or illegally collected tax, Section 112(A) and (C) of
the National Internal Revenue Code govern:
Section 112. Refunds or Tax Credits of Input Tax. -
(A) Zero-rated or Effectively Zero-rated Sales. — Any VAT-
registered person, whose sales are zero-rated or effectively zero-
rated may, within two (2) years after the close of the taxable
quarter when the sales were made, apply for the issuance of a
tax credit certificate or refund of creditable input tax due or
paid attributable to such sales, except transitional input tax, to
the extent that such input tax has not been applied against
output tax: Provided, however, That in the case of zero-rated
sales under Section 106(A)(2)(a)(1), (2) and (B) and Section 108
(B)(1) and (2), the acceptable foreign currency exchange
proceeds thereof had been duly accounted for in accordance
with the rules and regulations of the Bangko Sentral ng
Pilipinas (BSP): Provided, further, That where the taxpayer is
engaged in zero-rated or effectively zero-rated sale and also in
taxable or exempt sale of goods or properties or services, and
the amount of creditable input tax due or paid cannot be
directly and entirely attributed to any one of the transactions, it
shall be allocated proportionately on the basis of the volume of
sales
....
(C) Period within which Refund or Tax Credit of Input Taxes shall
be Made. — In proper cases, the Commissioner shall grant a
refund or issue the tax credit certificate for creditable input
taxes within one hundred twenty (120) days from the date of
submission of complete documents in support of the application
filed in accordance with Subsection (A) hereof.
In case of full or partial denial of the claim for tax refund or tax
credit, or the failure on the part of the Commissioner to act on
the application within the period prescribed above, the taxpayer
affected may, within thirty (30) days from the receipt of the
decision denying the claim or after the expiration of the one
hundred twenty day-period, appeal the decision or the unacted
claim with the Court of Tax Appeals.
Section 112(C) of the National Internal Revenue Code provides
two (2) possible scenarios.[108] The first is when the
Commissioner of Internal Revenue denies the administrative
claim for refund within 120 days.[109] The second is when the
Commissioner of Internal Revenue fails to act within 120 days.
[110]
 Taxpayers must await either for the decision of the
Commissioner of Internal Revenue or for the lapse of 120 days
before filing their judicial claims with the Court of Tax Appeals.
[111]
 Failure to observe the 120-day period renders the judicial
claim premature.[112]
CE Luzon's reliance on Atlas is misplaced because Atlas did not
squarely address the issue regarding the prescriptive period in
filing judicial claims for refund of creditable input tax.
[113]
 Atlas did not expressly or impliedly interpret Section 112(C)
of the National Internal Revenue Code.[114] The main issue
in Atlas was the reckoning point of the two (2)-year prescriptive
period stated in Section 112(A).[115] The interpretation
in Atlas was later rectified in Commissioner of Internal Revenue
v. Mirant Pagbilao Corporation.[116]
It was Aichi[117] that directly tackled and interpreted Section
112(C) of the National Internal Revenue Code. In determining
whether Aichi's judicial claim for refund of creditable input tax
was timely filed, this Court declared:
Section 112 (D) of the NIRC clearly provides that the CIR has
"120 days, from the date of the submission of the complete
documents in support of the application [for tax refund/credit],"
within which to grant or deny the claim. In case of full or partial
denial by the CIR, the taxpayer's recourse is to file an appeal
before the CTA within 30 days from receipt of the decision of the
CIR. However, if after the 120-day period the CIR fails to act on
the application for tax refund/credit, the remedy of the taxpayer
is to appeal the inaction of the CIR to CTA within 30 days.
....
Respondent's assertion that the non-observance of the 120-day
period is not fatal to the filing of a judicial claim as long as both
the administrative and the judicial claims are filed within the
two-year prescriptive period has no legal basis.
There is nothing in Section 112 of the NIRC to support
respondent's view. Subsection (A) of the said provision states
that "any VAT-registered person, whose sales are zero-rated or
effectively zero-rated may, within two years after the close of the
taxable quarter when the sales were made, apply for the
issuance of a tax credit certificate or refund of creditable input
tax due or paid attributable to such sales." The phrase "within
two (2) years . . . apply for the issuance of a tax credit certificate
or refund" refers to applications for refund/credit filed with the
CIR and not to appeals made to the CTA. This is apparent in the
first paragraph of subsection (D) of the same provision, which
states that the CIR has "120 days from the submission of
complete documents in support of the application filed in
accordance with Subsections (A) and (B)" within which to decide
on the claim.[118]
The Aichi doctrine was reiterated by this Court in San Roque,
[119]
 which held that the 120-day and 30-day periods in Section
112(C) of the National Internal Revenue Code are both
mandatory and jurisdictional.[120]
In the present case, only CE Luzon's second quarter claim was
filed on time. Its claims for refund of creditable input tax for the
first, third, and fourth quarters of taxable year 2003 were filed
prematurely. It did not wait for the Commissioner of Internal
Revenue to render a decision or for the 120-day period to lapse
before elevating its judicial claim with the Court of Tax Appeals.
However, despite its non-compliance with Section 112(C) of the
National Internal Revenue Code, CE Luzon's judicial claims are
shielded from the vice of prematurity. It relied on the Bureau of
Internal Revenue Ruling DA-489-03,[121] which expressly states
that "a taxpayer-claimant need not wait for the lapse of the 120-
day period before it could seek judicial relief with the [Court of
Tax Appeals] by way of a Petition for Review."[122]
San Roque exempted taxpayers who had relied on the Bureau of
Internal Revenue Ruling DA-489-03 from the strict application
of Section 112(C) of the National Internal Revenue Code.[123] This
Court characterized the Bureau of Internal Revenue Ruling DA-
489-03 as a general interpretative rule,[124] which has "misle[d]
all taxpayers into filing prematurely judicial claims with the
C[ourt] [of] T[ax] A[ppeals]."[125]Although the Bureau of Internal
Revenue Ruling DA-489-03 is an "erroneous interpretation of
the law,"[126] this Court made an exception explaining that
"[t]axpayers should not be prejudiced by an erroneous
interpretation by the Commissioner, particularly on a difficult
question of law."[127]
Taxpayers who have relied on the Bureau of Internal Revenue
Ruling DA-489-03, from its issuance on December 10, 2003
until its reversal on October 6, 2010 by this Court in Aichi, are,
therefore, shielded from the vice of prematurity.[128] CE Luzon
may claim the benefit of the Bureau of Internal Revenue Ruling
DA-489-03. Its judicial claims for refund of creditable input tax
for the first, third, and fourth quarters of 2003 should be
considered as timely filed.
However, the case should be remanded to the Court of Tax
Appeals for the proper computation of creditable input tax to
which CE Luzon is entitled.
II
In a Rule 45 Petition, only questions of law may be raised.
[129]
 "This Court is not a trier of facts."[130] The determination of
whether CE Luzon duly substantiated its claim for refund of
creditable input tax for the second quarter of taxable year 2003
is a factual matter that is generally beyond the scope of a
Petition for Review on Certiorari. Unless a case falls under any
of the exceptions, this Court will not undertake a factual review
and look into the parties' evidence and weigh them anew.
In the Petition docketed as G.R. Nos. 199676-77, the
Commissioner of Internal Revenue failed to establish that this
case is exempted from the general rule. Hence, this Court will
no longer disturb the Court of Tax Appeals' findings on the
matter.
WHEREFORE, the Petition in G.R. No. 197526
is GRANTED while the Petition in G.R. Nos. 199676-77
is DENIED. The Amended Decision dated June 27, 2011 of the [8]
 Id. at 21-22.
Court of Tax Appeals En Banc in C.T.A. EB NO. 554
is REVERSED and SET ASIDE. However, the case [9]
 Id. at 22.
is REMANDED to the Court of Tax Appeals for the
determination and computation of creditable input tax to which [10]
 Id. at 217, Comment.
CE Luzon Geothermal Power Company, Inc. is entitled.
[11]
 Id.
SO ORDERED.
[12]
 Id. at 216.
Carpio (Chairperson), Peralta, Mendoza, and Martires, JJ.,
concur.  [13]
 Id. at 217.

[1]
 Rollo (G.R. No. 197526), pp. 14-90.
[14]
 Id.

[2]
 Rollo (G.R. No. 199676-77), pp. 10-38.
[15]
 Id.

 Rollo (G.R. No. 197526), p. 21, Petition for Review on

[3]
[16]
 Id. at 110.
Certiorari.
[17]
 Rollo (G.R. No. 199676-77), pp. 17-19.
[4]
 Id.
 Rollo (G.R. No. 197526) pp. 107-126. The Decision was
[18]

[5]
 Id. at 20. penned by Associate Justice Erlinda P. Uy and concurred in by
Associate Justices Juanito C. Castañeda, Jr. and Olga Palanca-
Enriquez of the Second Division, Court of Tax Appeals, Quezon
[6]
 Rollo (G.R. No. 199676-77), p. 15.
City.

Rep. Act No. 9136, sec. 6, par. 5 provides:  [19]

 Id. at 124-125.
Section 6. Generation Sector. - 
....
Pursuant to the objective of lowering electricity rates to end-
[20]
 Id. at 23.
users, sales of generated power by generation companies shall
be value added tax zero-rated.
[21]
 Id. at 119.

[7]
 Rollo (G.R. No. 197526), p. 22.
[22]
 Id. at 125.
[23]
 Id. at 23. [34]
 Id. at 178-179.

[24]
 Id. at 128-133. [35]
 Id. at 26.

[25]
 Id. at 23-24.  Id. at 91-105. The Decision was penned by Associate Justice
[36]

Olga Palanca-Enriquez and concurred in by Presiding Justice

 Id. at 136-162. The Decision was penned by Associate
[26]
Justice Olga Palanca-Enriquez and concurred in by Associate
Justices Juanito C. Castañeda, Jr., Lovell R. Bautista, Caesar
A. Casanova, Esperanza R. Fabon-Victorino, and Cielito N.
Mindaro-Grulla. Presiding Justice Ernesto D. Acosta dissented
while Associate Justices Erlinda P. Uy and Amelia R. Cotangco-
Manalastas were on leave.
Ernesto D. Acosta, Associate Justices Juanito C. Castañeda,
Jr., Erlinda P. Uy, Caesar A. Casanova, Esperanza R. Fabon-
Victorino, Cielito N. Mindaro-Grulla, and Amelia R. Cotangco-
Manalastas. Associate Justice Lovell R. Bautista dissented.
[37]
 Id. at 104.
 Id. at 95. 646 Phil. 710 (2010) [Per J. Del Castillo, First
[38]

[27]
 Id. at 160. Division].

[28]
 Id. at 160-161. [39]
 Id. at 101.

 Id. at 171-179. The Decision was penned by Associate

[29] [40]
 Id. at 101-103.
Justice Olga Palanca-Enriquez and concurred in by Presiding
Justice Ernesto D. Acosta, Associate Justices Juanito C. [41]
 Id. at 104.
Castañeda, Jr., Erlinda P. Uy, Caesar A. Casanova, Esperanza
R. Fabon-Victorino, Cielito N. Mindaro-Grulla and Amelia R. [42]
 Id. at 14-90.
Cotangco-Manalastas. Associate Justice Lovell R. Bautista
dissented. [43]
 Id. at 27.
[30]
 Id. at 25-26. [44]
 Id. at 14.
[31]
 Id. at 173-174. [45]
 Rollo (G.R. No. 199676-77), pp. 10-38.
[32]
 Id. at 176. [46]
 Id. at 11.
[33]
 Id. [47]
 Id. at 33.
[48]
 Id. at 10. but such suit or proceeding may be maintained, whether or not
such tax, penalty, or sum has been paid under protest or
[49]
 Rollo (G.R. No. 197526), 214-242. duress.

[50]
 Rollo (G.R. No. 199676-77), 343-344. 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
[51]
 Id. at 345. penalty regardless of any supervening cause that may arise
after payment: Provided, however, That the Commissioner may,
even without a written claim therefor, refund or credit any tax,
[52]
 Id. at 358-375. where on the face of the return upon which payment was made,
such payment appears clearly to have been erroneously paid.
[53]
 Rollo (G.R. No. 197526), pp. 269-308.
[61]
 Rollo (G.R. No. 197526), p. 28.
[54]
 Id. at 323-323-A.
[62]
 Id. at 39-42.
[55]
 Id. at 328-339.
[63]
 Id. at 43-45.
[56]
 Id. at 344-366.
[64]
 Id. at 45.
[57]
 Id. at 368-405.
[65]
 Id. at 53.
[58]
 Id. at 28.
[66]
 Rollo (G.R. No. 197526), p. 50.
[59]
 551 Phil. 519 (2007) [Per J. Chico-Nazario, Third Division].
[67]
 Id. at 301-303.
[60]
 TAX CODE, sec. 229 provides:
[68]
 Id. at 39.
Section 229. Recovery of Tax Erroneously or Illegally Collected.
— No suit or proceeding shall be maintained in any court for [69]
 Id. at 66.
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
[70]
 Id.
without authority, or of any sum alleged to have been
excessively or in any manner wrongfully collected, until a claim
[71]
 Id. at 66-67.
for refund or credit has been duly filed with the Commissioner;
  Id. at 225-231. The Commissioner meant Section 112(C) in
[72] [88]
 Id.
her Comment which mentioned Section 112 (D) instead.
[89]
 Id. at 371.
[73]
 Id. at 227.
[90]
 Id.
[74]
 Id. at 229.
[91]
 Id.
[75]
 Id.
[92]
 Rollo (GR.No. 197526), p. 28.
[76]
 Id. at 234-235.
[93]
 Rollo (G.R. No. 199676-77) p. 25.
[77]
 Id. at 236.
[94]
 Id.
[78]
 Id. at 237.
 Commissioner of Internal Revenue v. San Roque Power Corp.,
[95]

[79]
 Id. at 231-232. 703 Phil. 310, 365 (2013) [Per J. Carpio, En Banc].

[80]
 Id. at 232.  Commissioner of Internal Revenue v. Seagate Technology
[96]

(Philippines), 491 Phil. 317, 332 (2005) [Per J. Panganiban,

[81]
 Rollo (G.R. No. 199676-77), p. 11. Third Division].

[82]
 Id. at 28-29.
[97]
 TAX CODE, sec. 110(A)(3) provides:

[83]
 Id. at 30. Section 110. Tax Credits. -
(A) Creditable Input Tax. - 
[84]
 Id. at 363-364. ...
(3).... 
The term "input tax" means the value-added tax due from or
[85]
 Id. at 365-367. paid by a VAT-registered person in the course of his trade or
business on importation of goods or local purchase of goods or
[86]
 Id. at 369. services, including lease or use of property, from a VAT-
registered person. It shall also include the transitional input tax
[87]
 Id. at 370. determined in accordance with Section 111 of this Code. 
The term "output tax" means the value-added tax due on the
sale or lease of taxable goods or properties or services by any [106]
 703 Phil. 310 (2013) [Per J. Carpio, En Banc].
person registered or required to register under Section 236 of
this Code. [107]
 Id. at 365-366.
[98]
 See TAX CODE, sec 110(A)(3).  Commissioner of Internal Revenue v. Aichi Forging Company
[108]

of Asia, Inc., 646 Phil. 710, 732 (2010) [Per J. Del Castillo, First
[99]
 TAX CODE, sec. 110(B) provides: Division].

SECTION 110. Tax Credits. - [109]

 Id.
....
(B) Excess Output or Input Tax. -If at the end of any taxable [110]
 Id.
quarter the output tax exceeds the input tax, the excess shall
be paid by the VAT-registered person. If the input tax exceeds [111]
 Id. at 730-732.
the output tax, the excess shall be carried over to the
succeeding quarter or quarters. Provided, however, that any [112]
 Id. at 732.
input tax attributable to zero-rated sales by a VAT-registered
person may at his option be refunded or credited against other
internal revenue taxes, subject to the provisions of Section 112.  Commissioner of Internal Revenue v. San Roque Power Corp.,
[113]

703 Phil. 310, 357-358 (2013) [Per J. Carpio, En Banc].

[100]
 TAX CODE, sec. 110(B).
[114]
 Id. at 358.
 CBK Power Company Ltd., v. Commissioner of Internal
[101]

Revenue, 750 Phil. 748, 762-764 (2015) [Per J. Perlas-Bernabe,

[115]
 Id.
First Division].
[116]
 586 Phil. 712 (2008) [Per J. Velasco, Jr., Second Division].
 Commissioner of Internal Revenue v. San Roque Power Corp.,
[102]

703 Phil. 310, 368-369 (2013) [Per J. Carpio, En Banc]. [117]

 646 Phil. 710 (2010) [Per J. Del Castillo, First Division].

[103]
 Id. at 365. [118]
 Id. at 731.

[104]
 TAX CODE, sec 110(B). [119]
 703 Phil. 310 (2013) [Per J. Carpio, En Banc].

[105]
 TAX CODE, sec. 112(A). [120]
 Id. at 371.
[121]
 Rollo (G.R. No. 197526), pp. 67-68. Elections, 374 Phil. 308 (1999) [Per J. Ynares-Santiago, En
Banc].
[122]
 Id. at 68.

 703 Phil. 310, 372-377 (2013) [Per J. Carpio, En Banc]. See

[123]

CBK Power Co., Ltd. v. Commissioner of Internal Revenue, 744

Phil. 559 (2014) [Per J. Leonen, En Banc].

[124]
 Id. at 376.

[125]
 Id. at 373.
Source: Supreme Court E-Library | Date created: November 05,
 Id. at 376. See Separate Opinion of J. Leonen
[126]
2019 
in Commissioner of Internal Revenue v. San Roque Power Corp., This page was dynamically generated by the E-Library Content
703 Phil. 310, 372-377 (2013) [Per J. Carpio, En Banc]. Management System

[127]
 Id. at 374.
Supreme Court E-Library
[128]
 Id. at 371-377.

[129]
 RULES OF COURT, Rule 45, sec. 1 provides:

Section 1. Filing of Petition with Supreme Court. — A party

desiring to appeal by certiorari from a judgment or final order
or resolution of the Court of Appeals, the Sandiganbayan, the
Regional Trial Court or other courts whenever authorized by
law, may file with the Supreme Court a verified petition for
review on certiorari. The petition shall raise only questions of
law which must be distinctly set forth.

 Don Orestes Romualdez Electric Cooperative, Inc. v. National

[130]

Labor Relations Commission, 111 Phil. 268, 274 (1999) [Per J.

Pardo, First Division], citing Caruncho III v. Commission on
 [ G.R. No. 181474, July 26, 2017 ]

PEOPLE OF THE PHILIPPINES, PLAINTIFF-APPELLEE, V.

ROMALDO LUMAYAG Y DELA CRUZ, DIONY OPINIANO Y
VERANO, AND JERRY[1] DELA CRUZ Y DIAZ, ACCUSED,
DIONY OPINIANO Y VERANO, ACCUSED-APPELLANT.

DECISION

LEONEN, J.: 

This resolves the appeal filed by Diony Opiniano y Verano

(Opiniano) under Rule 124, Section 13(c)[2] of the Revised Rules
of Criminal Procedure, from the Decision[3] dated

July 31, 2007 of the Court of Appeals affirming his conviction

for the special complex crime of robbery with homicide.[4] In the
Information[5]dated December 3, 1997, Opiniano,[6] Romaldo
Lumayag (Lumayag), and Jerry Dela Cruz (Dela Cruz) were
charged with the crime of robbery with homicide:

That on or about the 29th day of November 1997, in Quezon

City, Philippines, the said accused, conspiring together,
confederating with and mutually helping one another, with intent
of gain and by means of force, violence and intimidation against
persons, to wit: by entering the residence of Eladio Santos y
Gutierrez and Leonor Santos y Reyes located at No. 548 Tahimik
St., Pag-ibig sa Nayon, this City, and once inside for the purpose
of enabling said accused, to take, steal and carry away cash
money from the house of said Eladio Santos y Gutierrez and
814 Phil. 537
Leonor Santos y Reyes, the said accused with intent to kill and
SECOND DIVISION taking advantage of their superior strength, did then and there,
wilfully, unlawfully, feloniously and treacherously attack, assault
and employ personal violence upon said Eladio Santos y
Gutierrez and Leonor Santos y Reyes, by stabbing them
repeatedly with the use of bladed weapons and big wooden stick,
hitting them on the different parts of their bodies, thereby
inflicting upon them mortal wounds which were the direct and
immediate cause of their deaths and thereafter, the said accused
pursuant to their conspiracy, with intent of gain, did then and
there, wilfully, unlawfully and feloniously take, steal and carry
away
One bag containing money in different denominations
(1) amounting to P5,139.00, more or less with some paper
bills, black leather belt, wallet with ID, sleeveless green
shirt, Marlboro cigarettes, and three (3) lighters and bids
[sic] of rosary,
One pair of gold earrings with diamond,
(1)
Two pieces of coins roughing [sic] paper with markings,
(2)
One [C]itizen watch worth P1,500.00
(1)
One gold ring with big stone (brillante) worth P55,000.00,
(1)
One gold ring with small stone (brillante) worth P15,000.00,
(1)
One pair of earrings with diamonds worth P5,000.00,
(1)
One pair of earrings with pearl worth P20,000.00,
(1)
from the house of said Eladio Santos y Gutierrez and Leonor
Santos y Reyes, to the damage and prejudice of the heirs of
Eladio Santos y Gutierrez and Leonor Santos y Reyes.
CONTRARY TO LAW.[7]
The three (3) accused pleaded not guilty during their
arraignment on January 12, 1998. No stipulations of fact were
entered during pre-trial. Joint trial ensued.[8]
The prosecution presented Honorata S. Estrella (Estrella),
daughter of the victims; PO2 Rodolfo Paule (PO2 Paule) of the
Caloocan Police Station; SPO2 Rolando Ko (SPO2 Ko), PO3
Alberto Gomez, Jr. (PO3 Gomez), and PO2 Ferdinand Flores
(PO2 Flores) of the La Loma Police Station; National Bureau of
Investigation Medico-Legal Officer Dr. Floresto Arizala, Jr. (Dr.
Arizala); and National Bureau of Investigation Forensic Biologist
I Pet Byron T. Buan (Forensic Biologist Buan) as witnesses.
[9]
 On the other hand, the defense presented Dela Cruz and
Opiniano as witnesses.[10]
Evidence for the prosecution established the following facts:
On November 30, 1997, at around 2:30 a.m., spouses Eladio
Santos (Eladio) and Leonor Santos (Leonor) were found dead in
the garage of their house at No. 548 Tahimik St., Brgy. Pag-ibig
sa Nayon, Quezon City.[11] At the time of the incident, Eladio
was 72 years old while Leonor was 71 years old.[12]
The Spouses Santos were dealers of soft drinks and beer. They
maintained a store, adjacent to their two-storey house which
sold other commodities such as rice, cigarettes, and canned
goods. Their daughter, Estrella, helped manage the store daily
from 8:00 a.m. or 9:00 a.m. to 3:00 p.m. or 4:00 p.m. [13] Dela
Cruz was their stay-in helper. He had been working for them for
only three (3) to five (5) days before the couple were killed. [14]
Around 2:30 a.m. of November 30, 1997, Estrella received a call
from her sister that their parents were stabbed. She and her
husband hurriedly went to the store. They noticed policemen
and reporters waiting outside the store. When she entered the
garage, Estrella saw the bloodied and dead bodies of her
parents, while the police took pictures of the victims. She saw
the store and the house in disarray. She noticed that cigarettes,
lighters, coins, and bills were missing.[15] Estrella remembered
wrapping some coins and signing her initials on them for
eventual bank deposit.[16]
When she went up to the second floor, she found the master
bedroom in shambles, and noticed that some money and her
mother's pieces of jewelry were missing. The missing pieces of
jewelry were a watch worth P1,500.00, a ring with a big
diamond stone worth more than P55,000.00, a ring with small
diamonds worth at least P15,000.00, a pair of earrings with a
Russian diamond worth P5,000.00, and a pair of pearl earrings
worth P20,000.00. Estrella estimated that the total cash
missing amounted to P100,000.00.[17] She also noticed that the
kitchen knife was missing.[18] It had a "black rubber band
wrapped around the handle[.]"[19] She later found the knife full
of blood inside a case of beer. The knife was turned over to the
La Loma police.[20]
Around 9:00 p.m. of the previous day, November 29, 1997, PO2
Paule and SPO1 Eduardo Roderno (SPO1 Roderno) of the
Caloocan police were traversing C-3 Road aboard a police-
marked vehicle when they noticed a man carrying a heavy-
looking bag. When they approached him, the man ran away.
After a brief chase, the man was cornered. PO2 Paule noticed
that he was nervous and sweating. His right leg was stained
with blood and his right waistline was bulging with an object,
which turned out to be a double bladed 9-inch mini kris.[21] He
did not answer when asked about the bloodstain on his leg.[22]
They brought him to the police station where he identified
himself as Jerry Dela Cruz.[23] The bag yielded three (3) reams of
Marlboro cigarettes, a lighter, some coins, and a blue denim
wallet with cash in different denominations amounting to
P1,470.00. PO2 Paule also noticed that the P500.00 bill in the
wallet was stained with fresh blood.[24]
Upon further interrogation, Dela Cruz verbally confessed that
he and his companions, whom he later revealed as "Ango" or
Lumayag,[25] and Opiniano,[26] "had just killed and robbed an old
couple."[27] He was supposed to bring the contents of the bag to
his cohorts in the illegal settlers' area in Malabon.[28] During
cross-examination, PO2 Paule affirmed that Dela Cruz was not
aided by a lawyer, nor was his confession reduced into writing.
PO2 Paule further testified that when they informed Dela Cruz
of his right to a lawyer, the latter remained silent. [29]
Dela Cruz then accompanied the police officers to the scene of
the crime. When they peeped through the gate, using a search
light, they saw a "female lying on the floor,"[30] covered with
blood.[31] They called the La Loma Police Station, which had
jurisdiction over the case.[32] PO2 Paule and the other Caloocan
police operatives, together with Dela Cruz, then proceeded to
Letre, Malabon where they were able to apprehend Opiniano.[33]
SPO2 Ko, the officer on duty at Station 1, Mayon, La Loma,
Quezon City at that time, was assigned to investigate the case.
When he arrived at the crime scene at around 3:00 a.m. of
November 30, 1997, members of the Scene of the Crime
Operative led by a certain Lt. Pelotin, and members of media
and barangay tanods were already in the area.[34] Estrella also
arrived.[35]
Upon the arrival of a barangay official, the gate was opened. Dr. Arizala, the medico-legal officer of the National Bureau of
[36]
 SPO2 Ko saw Leonor "sprawled on the ground leaning on the Investigation who conducted the autopsies of the victims,
wall of the garage and . . . [Eladio] was placed on top of a testified that Eladio suffered 14 incised wounds, two (2)
bicycle[.]"[37] Both were dead. He also saw that "[t]he store was contusions, one (1) abrasion, and five (5) stab wounds.[49] On
forcibly opened and some of the store articles were the other hand, Leonor sustained 28 incised wounds, a
disarranged."[38] Inside the house, he found one (1) of the rooms contusion, five (5) abrasions, two (2) lacerations, and three (3)
in the second floor ransacked and in total disarray. He stab wounds.[50] Dr. Arizala said that the incised wounds could
requested the Scene of the Crime Operative team, which took have been caused by a knife while the numerous wounds could
pictures of the crime scene,[39] to bring the bodies of the victims be attributed to more than one (1) assailant.[51] He also found
to the morgue for appropriate autopsy by the National Bureau that the stab wounds sustained by the victims were mostly
of Investigation. He proceeded to the Caloocan police precinct fatal.[52]
where he saw Dela Cruz and Opiniano.[40]
Forensic Biologist Buan testified that he had examined the
The Caloocan police turned over to SPO2 Ko the multi-colored blood on the knives and peso bills recovered by the police, and
bag with its contents and the mini-kris that were recovered his findings, which were all stated in his Biology Report No. B-
from Dela Cruz. SPO2 Ko brought the bloodstained bills, the 97-1349,[53] were as follows:[54]
mini-kris, and the knife found by Estrella to the National
Bureau of Investigation for testing of human blood.[41] He did
Specimen Result
not take the fingerprints of the accused or submit the items for
fingerprinting at the Philippine National Police Crime Laboratory 1. One (1) bladed weapon POSITIVE RESULTS for the
before submitting them to the National Bureau of Investigation about 12" inches long presence of [h]uman blood
because he thought it was no longer necessary.[42] including its rubberized showing the reaction of Group
handle. "B".
SPO2 Ko brought Dela Cruz and Opiniano to the La Loma Police 2. One (1) curved bladed NEGATIVE RESULTS for the
Station for further investigation.[43] PO3 Gomez conducted the weapon about 9" inches long presence of [h]uman blood.
body search on the suspects. As Opiniano was undressing, a including its handle with
pair of earrings dropped to the floor.[44] When asked whose they improvised holster.
were, Opiniano replied that they belonged to a distant relative.
[45] 3. One (1) P500.00 peso bill. POSITIVE RESULTS for the
presence of [h]uman blood
showing the reactions of Group
About 1:00 p.m. on November 30, 1997, PO2 Flores and other "B".
La Loma police officers, together with Dela Cruz, were
dispatched to Kaysikat, Antipolo, Rizal where they arrested 4. Nine (9) P100.00 peso bills. POSITIVE RESULTS for the
Lumayag.[46] When Lumayag was frisked, two (2) coin wrappers presence of [h]uman blood
bearing initials were found inside his pocket.[47] Estrella later showing the reactions of Group
identified the initials in the coin wrappers as hers.[48] "O".
5. Two (2) P50.00 peso bills. POSITIVE RESULTS for [h]uman
blood showing the reaction of
Group “B”.[55]
Forensic Biologist Buan further testified that he had also
examined the fresh blood sample of Leonor and Eladio. His
examination showed that Leonor's blood belonged to group type
"O," while that of Eladio belonged to group type "B.”[56]
On the other hand, the defense presented their version of the
facts as follows:
Dela Cruz, who at the time of the commission of the crime was
only 16 years old,[57] testified that he was employed on
November 25, 1997 by the victims, whom he called Lolo and
Lola. On November 26, 1997, Lumayag, his first cousin,
[58]
 visited him at his employer's house. Lumayag borrowed from
him P50.00 to buy food. The following day, November 27, 1997,
Lumayag visited him again to ask for cigarettes. Before leaving,
however, Lumayag disclosed that he would come back on
November 29, 1997 to rob his employer's house.[59] When Dela
Cruz dissuaded Lumayag from his plans, the latter merely
replied, "Bahala ka, pupunta rin ako dyan. "[60]
Around 8:00 p.m. of November 29, 1997, Dela Cruz was eating
in the kitchen when he heard Leonor shouting for help. When
he went out of the kitchen, he saw Lumayag holding Leonor by
the neck.[61] When he asked Lumayag, "Bakit ganon?"[62] the
latter responded, "Wala kang pakialam. Lakad namin ito."[63]
While Leonor was being held by Lumayag, Eladio "came out of
the room [in the lower portion of the house], he went inside the
store [and] took a knife."[64] When Eladio came out of the store,
Lumayag threw Leonor to Opiniano, grabbed the knife from
Eladio, and stabbed Eladio several times. Dela Cruz just stood
by in fear. He attempted to stop Lumayag, but the latter
threatened him. As Eladio fell, Dela Cruz turned around and
saw Leonor already dead. Opiniano stabbed her with a knife.[65]
Lumayag then went upstairs and came down carrying money in
paper bills. He counted the money, which amounted to
P25,000.00, and pocketed them.[66] He then went to the store,
took the paper-wrapped coins from the drawer,[67] and placed
them inside Dela Cruz's bag.[68] He also searched Leonor and got
money from her. Likewise, he took Eladio's wallet and placed
the money in the wallet.[69]
Lumayag then directed Dela Cruz to go with them.[70] Dela Cruz
told them, "Patayin n'yo na lang ako; wala ng iba; madadamay
din ako."[71]Lumayag answered him, "Hindi kita papatayin pero
sumama ka na lang sa akin."[72] Dela Cruz told him that he
would think it over. Lumayag then instructed Dela Cruz to
bring the money to Letre, Malabon or else he would kill him. [73]
After the two (2) had left, Dela Cruz also left for Letre, but was
caught by the Caloocan police officers upon reaching
Monumento.[74]
For his part, Opiniano put up the defense of denial and alibi. He
testified that when he was arrested on the night of November
29, 1997, he was babysitting his cousin Manang Ligaya
Verano's child at her house in Letre, Malabon.[75] He did not
know the victims or why Dela Cruz, who was his town mate
from Samar, implicated him in the crime.[76]
On February 8, 2000, Branch 76, Regional Trial Court, Quezon
City rendered a Decision,[77] which found Opiniano and
Lumayag guilty as principals of the crime of robbery with
homicide and imposed upon them the penalty of reclusion
perpetua. On the other hand, the trial court found Dela Cruz as
an accessory to the crime and imposed upon him an
indeterminate prison sentence of two (2) years, four (4) months,
and one (1) day to four (4) years and two (2) months of prision
correccional.[78] The dispositive portion of the decision read:
WHEREFORE, finding the accused Romaldo Lumayag and
Diony Opiniano guilty beyond reasonable doubt as principals in
conspiracy with each other, for the crime of robbery with
homicide described and penalized under Art. 294 of the Revised
Penal Code, as amended by RA 7659 there being no modifying
circumstance, and applying Art. 63 par. 2 of the Revised Penal
Code, they are hereby sentenced to each suffer imprisonment
of reclusion perpetua. Also, finding the accused Jerry dela Cruz
guilty beyond reasonable doubt as accessory for the crime of
robbery with homicide, with the mitigating circumstance of
minority, and applying the Indeterminate Sentence Law, he is
hereby sentenced to suffer imprisonment of two years[,] 4
months and 1 day to 4 years and 2 months of prision
correccional.
As to the civil liability, the accused Romaldo Lumayag and
Diony Opiniano are ordered to indemnify the heirs of Eladio
Santos and Leonor Santos, jointly and solidarity as follows:
1. The amount of P80,000.00 as their share in the civil
indemnity for the death of the two victims;
2. The amount of P80,000.00 as their share in the moral
damages for death of the two victims;
3. The amount of P134,775.00 as their share in the actual
damages for the expenses incurred as a result of their death;
4. The amount of P81,500 representing their share in the
reimbursement of the value of the pieces of jewelry taken during
the robbery.
As to the civil liability of Jerry dela Cruz who was found guilty
as accessory, he is also ordered to indemnify the heirs of Eladio
and Leonor Santos as follows:
1. [T]he amount of P20,000.00 as his share in the civil
indemnity for the two victims;
2. The amount of P20,000.00 as his share in the moral
damages;
3. The amount of P20,000.00 as his share in the actual
damages;
4. The amount of P10,000.00 as his share in the
reimbursement for the articles taken.
The earrings recovered has already been returned to the Santos
heirs. The cash in bills and coins in the amount of P5,000.00
more or less and the reams of Marlboro cigarettes are ordered
returned to the heirs of Eladio and Leonor Santos.
SO ORDERED.[79] (Underscoring in the original)
Only Opiniano appealed the Regional Trial Court's decision.
[80]
 In view of People v. Mateo,[81] this Court referred the case to
the Court of Appeals for intermediate review.[82]
On July 31, 2007, the Special Twelfth Division of the Court of
Appeals affirmed in toto[83] the Regional Trial Court's decision.
According to the Court of Appeals, the direct testimony of Dela
Cruz admitting their participation in the crime and Opiniano's
possession of the stolen items were clear proofs of his
involvement in the crime.[84] Thus:
WHEREFORE, premise[s] considered
the Appeal is DISMISSED. The Decision dated February 8,
2000 of the Regional Trial Court, Branch 76, Quezon City
is AFFIRMED IN TOTO.
SO ORDERED.[85] (Emphasis in the original)
The records of this case were elevated to this Court on February
14, 2008,[86] pursuant to the Court of Appeals' October 18, 2007
Resolution,[87] which gave due course to Opiniano's Notice of
Appeal.[88]
At issue is the sufficiency of evidence to convict the appellant of
robbery with homicide
The Regional Trial Court considered the following
circumstances sufficient to prove the culpability of the appellant
for the offense:
1. That Jerry dela Cruz was caught albeit by chance by
Caloocan City policemen while carrying a heavy bag which
when opened yielded reams of Marlboro cigarettes and cash in
coins and bills, among others;
2. The fact that dela Cruz' leg had fresh bloodstains and a 9-
inch kris found in his person. His immediate story to the police
led to the discovery of the dead bodies of the Santos couple in
their residence;
3. That articles such as the cigarettes and bills in different
denominations were among those taken from the victims'
house; the bloodstains found on some bills corresponded to the
blood types of Eladio and Leonor Santos;
4. That the pair of earrings which fell from the underwear of
Diony Opiniano when under investigation at the police station
belonged to the old woman and among those missing from her
room; and
5. That the two paper wrappers found in Lumayag's pants bore
the initial HE for Honorata Estrella, the daughter of the
Santoses who herself used to wrap the coins in the store and
would add her initials prior to bringing them to the bank for
deposit.[89]
Appellant Opiniano contends, however, that the totality of the
circumstantial evidence is "insufficient to support [his]
conviction beyond reasonable doubt."[90] He further argues that
the extra-judicial confession of Dela Cruz, implicating him in
the crime, is inadmissible in evidence, as it was obtained
without the assistance of counsel.[91] Lastly, Opiniano points to
inconsistencies in the testimonies of Dela Cruz and of the police
officers, which allegedly make their story incredible.[92]
We sustain the conviction of appellant Opiniano.
Dela Cruz's extrajudicial confession without counsel at the
police station without a valid waiver of the right to counsel —
that is, in writing andin the presence of counsel — is
inadmissible in evidence.[93] It is undisputed that Dela Cruz was
neither assisted by a lawyer nor was his confession reduced
into writing.[94] Further, when the police officers informed Dela
Cruz of his right to a lawyer, the latter did not say anything.
[95]
 Even so, such silence did not constitute a valid waiver of his
right to remain silent and to have a competent and independent
counsel. Article III, Section 12 of the Constitution states that
"[t]hese rights cannot be waived except in writing and in the
presence of counsel."
Dela Cruz was merely told of his Constitutional rights, but he
was never asked whether he understood what he was told or
whether he wanted to exercise or avail himself of such rights.
Q You stated that after a thorough interrogation, he confessed
to killing and robbing two couples. When he made that
confession, was he assisted by a lawyer?
A No.
Q Was his confession in writing?
A No, sir, but he verbally admitted.
Q Did you inform the accused of his right to a lawyer of his
own choice?
A Yes, sir.
Q And what did he say?
A Nothing, sir.
Q He did not tell you that he wanted a lawyer?
A No, sir, because our normal procedure sir is, every time we
interrogate the person, we always inform him of his
constitutional rights.[96]
This kind of perfunctory giving of the so-called Miranda rights is
what this Court has previously frowned upon as ineffective and
inadequate compliance with the mandates of the Constitution.
[97]
 Any confession obtained under these circumstances is flawed
and cannot be used as evidence not only against the declarant
but also against his co-accused.[98]
In People v. Jara,[99] this Court held that where a confession was
illegally obtained from two (2) of the accused, and consequently
were not admissible against them, with much more reason
should the same be inadmissible against a third accused who
had no participation in its execution.
Hence, Dela Cruz's extrajudicial confession is likewise
inadmissible against appellant Opiniano.
II
Nonetheless, even without Dela Cruz's extra-judicial confession,
Opiniano's conviction still stands. The eyewitness account of
Dela Cruz, corroborated by the testimony and findings of Dr.
Arizala and Forensic Biologist Buan, suffices to convict
accused-appellant Opiniano of the crime charged.
The Regional Trial Court aptly gave credence to Dela Cruz's
"graphic account of what transpired . . . that fateful night of
November 29, 1997."[100] The Regional Trial Court determined
Lumayag as the lead man, "who hatched the plan to rob the
couple,"[101] along with appellant as his co-conspirator.[102] As a
rule, findings of the trial court on the credibility of a witness will
generally not be disturbed on appeal as it was the trial court
which had the opportunity to observe the demeanor of the
witness during trial.[103] Here, there is no showing that the
Regional Trial Court overlooked or arbitrarily disregarded facts
and circumstances of significance to the case.
Dela Cruz's straightforward narration showed how Lumayag and
appellant Opiniano acted in concert to commit the robbery with
homicide:
ATTY. PEREZ
....
Q Will you demonstrate to me what you saw or what did
Romaldo Lumayag do to your lola?
A (Witness demonstrating; Romaldo Lumayag held the neck of A Yes, sir.
the lola with his right arm.) Q And what did you do?
Q When you saw this being done by Romaldo Lumayag, what A I just stood there because I was afraid.
did you do, Mr. Witness? Q You did not help your lolo?
A When I asked him "Bakit ganon?" He answered: "Wala kang A I tried to pacify but I could not do so.
pakialam. Lakad namin ito." Q Why?
Q Do you remember what happened thereafter? A Romaldo did not want me to pacify him. He was threatening
A Yes, sir. me.
Q What happened? Q Do you remember how many times did Romaldo Lumayag
A While lola was being held and she was shouting, lolo came stab your lolo?
out from the room. A Several times, sir.
Q And what happened after your lolo came out from the room? .. ..
A When my lolo came out of the room, he went inside the store Q Is that in one moment, Mr. Witness?
and [sic] took a knife. A Yes, sir.
.... Q And what happened thereafter, Mr. Witness? What
Q Was he able to get a knife? happened to your lolo?
A Yes, sir. A He fell by the sidecar.
Q And what did he do after he got the knife? Q By the way, Mr. Witness, you earlier testified that at that
A When my lolo came out of the store, my cousin threw my time, Opiniano was holding also your lolo, is that correct?
lola towards Opiniano and Romaldo Lumayag grabbed the A Yes, sir.
knife from lolo. Q Do you remember what happened thereafter?
.... A When I turned around, I saw my lola already dead.
Q . . . [B]efore Romaldo dragged your lola to Opiniano, where Q Why?
was Opiniano then?
A Opiniano killed my lola.
A He was outside the store, si[r].
Q And do you remember what he used in killing your lola?
Q Why? What was he doing there?
A Knife, sir.
A He closed the store.
Q Did you see that knife?
Q That is after lola shouted for help?
A Yes, sir.
A Yes, sir.
.. ..
Q And when your cousin Romaldo Lumayag was able to grab
Q You made mention, Mr. Witness, that your lolo was stabbed
the knife from your lolo, what did Romaldo Lumayag do?
by Romaldo Lumayag. Did you see what he used in stabbing
A He stabbed my lolo. your lolo?
Q You saw this Romaldo Lumayag stabbed your lolo? A Yes, sir.
.... A He put them in his pocket.
Q Kindly examine this knife, Mr. Witness, and tell us if that Q Do you remember what did he do after that?
was the knife that was used? .. ..
A This is the same knife used by Romaldo Lumayag. A While carrying my bag, he went inside the store, he took the
Q And that was the knife which was taken by your lolo from money from the drawer and removed my clothes and threw
the store? them in the store and then, he put the money inside the bag.
A Yes, sir, which he grabbed. .. ..
.... Q After putting these denominations in your bag, Mr. Witness,
Q You said, Mr. Witness, that your lola was being held by do you remember what did Romaldo Lumayag do
Opiniano. Is that correct? afterwards?
A Yes, sir. A He frisked my lola and got the money from her pocket.
Q Will you kindly tell us again, Mr. Witness, what happened to Q Do you remember where did Romaldo Lumayag put the
her. money which he got from the pockets of your lola?
.... A He took the wallet of my lolo and put the money there.
A She was stabbed by Opiniano. .. ..
Q And did you see the knife used by Opiniano in stabbing your Q Mr. Witness, do you remember what did Romaldo Lumayag
lola? do with the wallet after putting the money of your lola
A Yes, sir. inside?
.... A He put it inside the pocket of the bag.
Q What happened after that? Q After Romaldo Lumayag put the wallet at the side pocket of
A My cousin went upstairs. this bag, Mr. Witness, do you remember what happened
next?
....
A He told me to go with them.[104]
Q Then, after that what happened?
A When he went downstairs, he was carrying money.
"The testimony of a single witness, if credible and positive, is
....
sufficient to produce a conviction."[105] Dela Cruz was categorical
Q Did you know how much was that money Romaldo Lumayag and coherent in stating appellant Opiniano's participation in
was holding then? the robbing and killing of the Spouses Santos. His testimony
.... remained unshaken even on a lengthy and intense cross-
A P25,000.00, sir. examination from appellant Opiniano's counsel and the
Q How did you know that the money he was holding was prosecutor. His answers were candid and spontaneous, which,
P25,000.00? according to the Regional Trial Court, "could not have been
A He counted it on the floor. glamorized or embellished by someone ignorant and unknowing
Q Thereafter, what did he do with the money? as Jerry [D]ela Cruz."[106] He positively identified Lumayag and
Opiniano as the assailants who stabbed the victim spouses with
a knife. Dr. Arizala testified that Eladio and Leonor died as a
result of several stab wounds, inflicted by sharp-
edged[107] and single-bladed[108] instruments, on different areas
of their bodies. Moreover, the contents of the bag seized from
Dela Cruz - Marlboro cigarettes and coins in wrappers - were
the same things Estrella claimed to have been taken from the
store of her parents.[109] The bloodstains on the cash recovered
from Dela Cruz correspond to the blood types of the victims. [110]
When several accused are tried together, the confession made
by one (1) of them during the trial implicating the others is
evidence against the latter.[111]
In People v. De la Cruz:[112]
An accused is always a competent witness for or against his co-
accused, and the fact that he had been discharged from the
information does not affect the quality of his testimony, for the
admissibility, the relevancy, as well as the weight that should
be accorded his declarations are to be determined by the Rules
on Evidence. And in this connection, it has been held that the
uncorroborated testimony of an accused, when satisfactory and
convincing, may be the basis for a judgment of conviction of his
co-accused.[113]
Appellant Opiniano points to inconsistencies in Dela Cruz's
testimony vis a vis the testimonies of the police officers. For
instance, Dela Cruz testified that the police recovered a knife, a
pair of earrings, and a ring from appellant Opiniano. However,
PO2 Paule testified that no jewelry or weapon was taken from
appellant Opiniano.[114] Also, Dela Cruz's testimony that
appellant Opiniano was "slumped in a bangketa"[115] when he
was arrested in Letre, Malabon was allegedly contradicted by
PO2 Paule's testimony that appellant was "lying on a
bench"[116] when they found him.[117]
These inconsistencies do not minimize the value of Dela Cruz's
testimony. These minor contradictions pertained to matters
surrounding the arrest of appellant Opiniano and do not affect
his credibility.[118] They do not disturb the fact that Dela Cruz
saw appellant Opiniano and Lumayag commit the gruesome
crime, and the consistency of his testimony on these points. The
Regional Trial Court's conclusions were founded principally on
the direct, positive, and categorical assertions made by Dela
Cruz as regards material events in the crime.
Dela Cruz's credibility is enhanced by the absence of any
improper motive.[119] There was no evidence adduced to show
that he harbored any ill-feelings towards appellant Opiniano. In
fact, they were town mates from Gandara, Samar.[120] Even
appellant Opiniano admits that he could not think of a single
reason why Dela Cruz implicated him in the crime.[121]
In contrast, appellant Opiniano could only offer a lame denial
and alibi, which were replete with inconsistencies. There is no
corroborative evidence that appellant Opiniano was in another
place at the time the crime was committed; neither was it
clearly shown that it was physically impossible for him to be
present at the scene of the crime.[122]
All told, the prosecution proved appellant Opiniano's guilt
beyond reasonable doubt of the crime of robbery with homicide.
We affirm the findings of fact and conclusions of law of the
Court of Appeals.
As to civil liability, we reduce the actual damages to
P121,550.00 because these were the only expenses proven with
receipts.[123] Hence, appellant Opiniano's and Lumayag's share
in the actual damages would be P101,550.00. Further, in line
with current jurisprudence,[124] this Court increases appellant
Opiniano's and Lumayag's share in the award of civil indemnity
and moral damages from P80,000.00 to P130,000.00 each, for
the death of the two (2) victims. Interest at the rate of six
percent (6%) per annum shall be imposed on all damages
awarded from the date of the finality of this judgment until fully
paid.[125]
WHEREFORE, the July 31, 2007 Decision of the Court of
Appeals in CA-G.R. CR-H.C. No. 01265, is AFFIRMED with
MODIFICATIONas to the amounts awarded. Accused-appellant
Diony Opiniano y Verano is found GUILTY beyond reasonable
doubt of the special complex crime of robbery with homicide
and sentenced to suffer the penalty of reclusion perpetua.
Accused-appellants Diony Opiniano and Romaldo Lumayag are
jointly and severally ordered to pay the heirs of the victims, the
following amounts:
1. P130,000.00 as their share in the civil indemnity for the
death of the two (2) victims;
2. P130,000.00 as their share in the moral damages for the
death of the two (2) victims;
3. P101,550.00 as their share in the actual damages for
the expenses incurred as a result of their death;
4. P81,500.00 representing their share in the
reimbursement of the value of the pieces of jewelry taken
during the robbery.
Furthermore, all monetary awards for damages shall earn
interest at the legal rate of six percent (6%) per annum from the
date of the finality of this judgment until fully paid.
SO ORDERED.
Carpio, (Chairperson), Peralta, Mendoza, and Martires,
JJ., concur.  [7]
 "Jerry" is spelled as "Gerry" in his Certificate of Live Birth
[1]
(RTC records, p. 226). However, the Regional Trial Court
Decision (CA rollo, p. 55) and the Court of Appeals Decision
(Rollo, p. 3) used the name "Jerry".
 RULES OF COURT, Rule 124, sec. 13(c), as amended by A.M.
[2]
No. 00-5-03-SC, provides:
RULE 124. PROCEDURE IN THE COURT OF APPEALS 
....
SEC. 13. Certification or appeal of case to the Supreme
Court. — ... 
(c) In cases where the Court of Appeals imposes reclusion
perpetua, life imprisonment or a lesser penalty, it shall render
and enter judgment imposing such penalty. The judgment may
be appealed to the Supreme Court by notice of appeal filed with
the Court of Appeals. (Emphasis supplied)
 Rollo, pp. 3-24. The Decision was penned by Associate Justice
[3]
Ramon R. Garcia and concurred in by Associate Justices
Josefina Guevara-Salonga and Jose C. Reyes, Jr. of the Special
Twelfth Division, Court of Appeals, Manila.
[4]
 Id. at 24.
[5]
 CA rollo, pp. 21-23.
 The name indicated in the Information was Diony Penano.
[6]
However, "Penano" was later changed to "Opiniano" upon
motion of Atty. Raul Rivera, counsel for the three accused,
during trial (CA rollo, p. 57, Regional Trial Court Decision).
 CA rollo, pp. 21-22, Information.
[8]
 Id. at 57, Regional Trial Court Decision. [22]
 TSN, April 1, 1998, p. 9, Testimony of PO2 Rodolfo Paule.

[9]
 Rollo, pp. 6-7, Court of Appeals Decision.  The TSN, April 1, 1998 spells his name as "Gerry", while
[23]

other parts of the RTC records spell his name as "Jerry."

[10]
 Id. at 11-12.
 TSN, April 1, 1998, pp. 11-14, Testimony of PO2 Rodolfo
[24]

 CA rollo, p. 57, Regional Trial Court Decision, and TSN,

[11] Paule.
January 28, 1998, p. 4, Testimony of Honorata S. Estrella.
 TSN, July 21, 1998, p. 16, Testimony of PO2 Rodolfo Paule,
[25]

[12]
 CA rollo, p. 57, Regional Trial Court Decision. TSN, August 11, 1998, p. 7, Testimony of PO2 Ferdinand
Flores, and TSN, September 29, 1998, pp. 4-5, Testimony of
 TSN, January 28, 1998, pp. 4-6, Testimony of Honorata S.
[13] PO2 Ferdinand Flores.
Estrella.
 TSN, April 1, 1998, pp. 22-23, Testimony of PO2 Rodolfo
[26]

 TSN, January 28, 1998, pp. 4-6, Testimony of Honorata S.

[14] Paule.
Estrella, and TSN, March 4, 1998, p. 7, Testimony of Honorata
S. Estrella.
[27]
 TSN, April 1, 1998, p. 15, Testimony of PO2 Rodolfo Paule.

 TSN, January 28, 1998, pp. 6-10, Testimony of Honorata S.

[15] [28]
 Id. at 14-15.
Estrella.
 TSN, July 21, 1998, pp. 10-11, Testimony of PO2 Rodolfo
[29]

[16]
 Id. at 13. Paule.

[17]
 Id. at 10-13.
[30]
 TSN, April 1, 1998, p. 16, Testimony of PO2 Rodolfo Paule.

[18]
 Id. at 12.
[31]
 Id.

[19]
 Id.
[32]
 Id. at 17.

[20]
 Id.
[33]
 Id. at 22-23.

 TSN, April 1, 1998, pp. 7-9, Testimony of PO2 Rodolfo Paule,

[21]  TSN, February 11, 1998, pp. 3-4, Testimony of SPO2
[34]

TSN, July 21, 1998, p. 7, Testimony of PO2 Rodolfo Paule, and Rolando Ko.
CA rollo, p. 68, Regional Trial Court Decision.
[35]
 Id. at 5.  TSN, February 11, 1998, p. 9, Testimony of SPO2 Rolando
[48]

Ko, and TSN, October 6, 1998, pp. 4-5 and 8, Testimony of

[36]
 Id. at 4-5. Honorata S. Estrella.

[37]
 Id. at 5.  TSN, February 25, 1998, pp. 30 and 34-46, Testimony of Dr.
[49]

Floresto Arizala Jr
[38]
 Id. at 4.
[50]
 Id. at 52-53.
[39]
 Id.
[51]
 Id. at 36 and 55-56.
[40]
 Id. at 5.
[52]
 Id. at 43-45 and 58-60.
[41]
 Id. at 7-8.
[53]
 RTC records, p. 285.
 TSN, February 18,1998, pp. 16-17, Testimony of SPO2
[42]

Rolando Ko.  TSN, February 25, 1998, pp. 2 and 11-22, Testimony of Pet
[54]

Byron T. Buan.
 TSN, February 11, 1998, p. 9, Testimony of SPO2 Rolando
[43]

Ko.  RTC records, p. 285, Biology Report No. B-97-1349. The 12-
[55]

inch bladed weapon with rubberized handle was marked as

 RTC records, p. 302, Affidavit of Apprehension of PO3
[44] Exhibit "K", the 9-inch bladed weapon with improvised holster
Alberto Gomez, Jr. was marked as Exhibit "L", the P500.00 peso bill was marked as
Exhibit "M", the P100.00 peso bills were marked as Exhibit "N",
the P50.00 peso bills were marked as Exhibit "O" (TSN,
 TSN, March 25, 1998, pp. 7-8, Testimony of PO3 Alberto
[45]
February 25, 1998, pp. 12-14, Testimony of Pet Byron T. Buan).
Gomez, Jr.
 TSN, February 25, 1998, pp. 22-24, Testimony of Pet Byron
[56]
 TSN, August 11, 1998, pp. 5-8, Testimony of PO2 Ferdinand
[46]
T. Buan.
Flores, and TSN, September 29, 1998, pp. 3-4, Testimony of
PO2 Ferdinand Flores.
 RTC records, p. 226, Certificate of Live Birth of Gerry Diaz
[57]

Dela Cruz. Gerry was born on July 28 1981.

 TSN, August 11,1998, pp. 8-9, Testimony of PO2 Ferdinand
[47]

Flores.
 TSN, November 17, 1998, p. 2, Testimony of Romaldo
[58]

Lumayag.
  TSN, June 15, 1999, pp. 8-13, Testimony of Jerry Dela Cruz,
[59] [74]
 Id. at 34-36.
and TSN, July 20, 1999, pp. 13-16, Testimony of Jerry Dela
Cruz.  TSN, December 1, 1998, pp. 3-8 and 10-11, Testimony of
[75]

Diony Opiniano, and TSN, January 19, 1999, pp. 6-8,

[60]
 Id. at 16. Testimony of Diony Opiniano.

[61]
 Id. at 19-21.  TSN, December 1, 1998, p. 15, Testimony of Diony Opiniano,
[76]

and TSN, January 12, 1999, pp. 3-11, Testimony of Diony

[62]
 Id. at 21. Opiniano.

[63]
 Id.  CA rollo, pp. 55-76. The Decision was penned by Judge
[77]

Monina A. Zenarosa.
 TSN, June 15, 1999, p. 22, Testimony of Jerry Dela Cruz,
[64]

and TSN, August 4, 1999, pp. 3-4, Testimony of Jerry Dela

[78]
 Id. at 75.
Cruz.
[79]
 Id. at 75-76.
 TSN, June 15, 1999 pp. 22-27, Testimony of Jerry Dela
[65]

Cruz, [80]
 RTC records, p. 267, Regional Trial Court Order.

[66]
 Id. at 28-30. [81]
 477 Phil. 752, 770-773 (2004) [Per J. Vitug, En Banc].

[67]
 Id. at 30. [82]
 Rollo, pp. 4-5, Court of Appeals Decision.

[68]
 Id. [83]
 Id. at 3-24.

[69]
 Id. at 31. [84]
 Id. at 17-24.

[70]
 Id. at 32-33. [85]
 Id. at 24.

[71]
 Id. at 33.  Id. at 1, Court of Appeals Judicial Records Division's Letter
[86]

to Supreme Court Judicial Records Office.

[72]
 Id.
[87]
 CA rollo, p. 250.
[73]
 Id. at 33-34.
[88]
 Id. at 245.  People v. Obrero, 387 Phil. 937, 953 (2000) [Per J. Mendoza,
[97]

Second Division], citing People v. Santos, 347 Phil. 723, 733

[89]
 Id. at 67-68. (1997) [Per J. Panganiban, Third Division], People v. Binamira,
343 Phil. 1, 21 (1997) [Per J. Panganiban, Third Division],
 Id. at 131, Brief for the Accused-Appellants Romaldo
[90] and People v. Ramirez, 292 Phil. 413, 427-431 (1993) [Per J.
Lumayag and Diony Opiniano. Davide, Jr., Third Division].

[91]
 Id. at 131-133.  People v. Artellero, 395 Phil. 876, 885-888 (2000) [Per J.
[98]

Quisumbing, Second Division].

[92]
 Id. at 135-136. [99]
 228 Phil. 490, 508 (1986) [Per J. Gutierrez, Jr., En Banc].
 People v. Bariquit, 395 Phil. 823, 847 (2000) [Per Curiam, En
[93]

Banc]; People v. Bonola, G.R. No. 116394, June 19, 1997, 274

[100]
 CA rollo, p. 69.
SCRA 238, 254 [Per J. Puno, En Banc].
[101]
 Id.
CONST., art. III, sec. 12(1) and (3) provide:
[102]
 Id.
Sec. 12. (1) Any person under investigation for the commission
of an offense shall have the right to be informed of his right to   People v. Gamo, 351 Phil. 944, 951-952 (1998) [Per J.
[103]

remain silent and to have competent and independent counsel
preferably of his own choice. If the person cannot afford the
services of counsel, he must be provided with one. These rights
cannot be waived except in writing and in the presence of
counsel.
Romero, Third Division]; People v. Sotto, 341 Phil. 184, 194
(1997) [Per J. Regalado, Second Division]; People v. Arcamo, et
a.l, 193 Phil. 124 129-130 (1981) [Per Curiam, En Banc].
 TSN, June 15, 1999, pp. 21-33, Testimony of Jerry Dela
[104]

. . . .  Cruz.
(3) Any confession or admission obtained in violation of this or
Section 17 hereof shall be inadmissible in evidence against him.  People v. Correa, 349 Phil. 615, 627 (1998) [Per J. Martinez,
[105]

En Banc]. See also People v. Macaliag, 392 Phil. 284, 296 (2000)

[94]
 TSN, July 21, 1998, p. 10, Testimony of PO2 Rodolfo Paule. [Per J. Ynares-Santiago, First Division].

[95]
 Id. at 11. [106]
 CA rollo, p. 70, Regional Trial Court Decision.

[96]
 Id. at 10-11.  TSN, February 25, 1998, p. 44, Testimony of Dr. Floresto
[107]

Arizala, Jr.
[108]
 Id. at 60. file=/jurisprudence/2016/april2016/202124.pdf > 9 [Per J.
Peralta, En Banc], citing People v. Cabtalan, 682 Phil. 164, 168
 TSN, March 4, 1998, pp. 3-4, Testimony of Honorata S.
[109] (2012) [Per J. Del Castillo, First Division].
Estrella.
 People v. Alicando, 321 Phil. 656, 720 (1995) [Per J. Puno.
[119]

 TSN, February 25, 1998, pp. 11-24, Testimony of Pet Byron

[110] En Banc].
T. Buan.
 TSN, November 17, 1998, pp. 2-3, Testimony of Romaldo
[120]

 People v. Guiapar, et a.l, 214 Phil. 475, 485 (1984) [Per J.

[111] Lumayag.
Makasiar, En Banc], citing People v. Cañete, et al., 150 Phil. 17
(1972) [Per Curiam, En Banc], People v. Orzame, et al., 123 Phil.  TSN, December 1, 1998, p. 15, Testimony of Diony
[121]

931, 936 (1966) [Per Curiam, En Banc], United States v.
Manabat and Simeon, 42 Phil. 569, 573-574 (1921) [Per J.
Ostrand, En Banc], and United States v. Remegio, 37 Phil. 599,
610-611 (1918) [Per J. Malcolm, En Banc].
Opiniano, and TSN, January 12, 1999, pp. 3-11, Testimony of
Diony Opiniano.
 See People v. Peralta, G.R. No. 208524, June 1, 2016 <
[122]

[112]
 215 Phil. 144 (1984) [Per J. Escolin, Second Division].
 Id. at 148, citing United States v. Wayne Shoup, 35 Phil. 56,
[113]
60 (1916) [Per J. Johnson, En Banc], and United States v.
Remigio, 37 Phil. 599, 610-611 (1918) [Per J. Malcolm, En
Banc].
http://sc.judiciary.gov.ph/pdf/web/viewer.html?
file=/jurisprudence/2016/june2016/208524.pdf > 9 [Per J. Del
Castillo, Second Division], citing People v. Madeo, 617 Phil. 638,
660 (2009) [Per J. Del Castillo, Second Division], and People v.
Lozada, 454 Phil. 241, 253 (2003) [Per Curiam, En Banc].
[123]
 RTC Records, pp. 272-273.

 CA rollo, p. 135, Brief for the Accused-Appellants Romaldo

[114]
 People v. Jugueta, G.R. No. 202124, April 5, 2016 <
[124]

Lumayag and Diony Opiniano. http://sc.judiciary.gov.ph/pdf/web/viewer.html?

file=/jurisprudence/2016/april2016/202124.pdf > 14 [PerJ.
[115]
 Id. at 136. Peralta, En Banc].

[116]
 Id.  People v. Jumawan, 733 Phil. 102, 159 (2014) [Per J. Reyes,
[125]

First Division]; People v. Vidaña, 720 Phil. 531, 545 (2013) [Per

[117]
 Id. at 135-136. J. Leonardo-De Castro, First Division]; People v. Cruz, 714 Phil.
390, 400-401 (2013) [Per J. Reyes, First Division], citing People
v. Cabungan, 702 Phil. 177, 190 (2013) [Per J. Del Castillo,
 See People v. Jugueta, G.R. No. 202124, April 5, 2016 <
[118]
Second Division]; People v. Gani, 710 Phil. 466, 476 (2013) [Per
http://sc.judiciary.gov.ph/pdf/web/viewer.html?
J. Peralta, Third Division], citing People v. Amistoso, 701 Phil.
345, 364 (2013) [Per J. Leonardo-De Castro, First
Division]; People v. Arpon, 678 Phil. 752, 792 (2011) [Per J.
Leonardo-De Castro, First Division].
Source: Supreme Court E-Library | Date created: November 05,
2019  above-named accused ROBERTO P. FUENTES, a high-ranking
This page was dynamically generated by the E-Library Content
Management System
808 Phil. 586
FIRST DIVISION
[ G.R. No. 186421*, April 17, 2017 ]
ROBERTO P. FUENTES, PETITIONER, VS. PEOPLE OF THE
PHILIPPINES, RESPONDENT.
D E C I S I O N
PERLAS-BERNABE, J.:  aforesaid charge.[7]
Assailed in this petition for review on certiorari[1] are the
Decision[2] dated September 30, 2008 and the
Resolution[3] dated February 16, 2009 of the Sandiganbayan in
Crim. Case No. 28342, which found petitioner Roberto P.
Fuentes[4] (Fuentes) guilty beyond reasonable doubt of violation
of Article 3 (e) of Republic Act No. (RA) 3019, entitled the "Anti-
Graft and Corrupt Practices Act."[5]
The Facts
The instant case stemmed from an Information charging
Fuentes of violation of Article 3 (e) of RA 3019, the accusatory
portion of which states:
That on January 8, 2002 and for sometime prior or subsequent
thereto at the Municipality of Isabel, Province of Leyte,
Philippines, and within the jurisdiction of this Honorable Court,
public officer, being the Municipal Mayor of Isabel, Leyte, in
such capacity and committing the offense in relation to office,
with evident bad faith and manifest partiality, did then and
there, willfully, unlawfully and criminally cause undue injury to
private complainant Fe N. Valenzuela by then and there
refusing for unreasonable length of time, to renew the latter's
Business Permit to engage in Ship Chandling Services in the
Port of Isabel without any legal basis or reason despite the fact
that Fe N. Valenzuela has complied with all the requirements
and has been operating the Ship Chandling Services in the Port
of Isabel since 1993, which act caused damage to the perishable
ship provisions of Fe N. Valenzuela for M/V Ace Dragon and a
denial of her right to engage in a legitimate business thereby
causing damage and prejudice to Fe N. Valenzuela.
CONTRARY TO LAW.[6]
On September 15, 2006, Fuentes pleaded "not guilty" to the
The prosecution alleged that private complainant Fe
Nepomuceno Valenzuela (Valenzuela) is the sole proprietor of
Triple A Ship Chandling and General Maritime Services (Triple
A), which was operating in the Port of Isabel, Leyte since 1993
until 2001 through the Business Permits issued by the Local
Government Unit of Isabel (LGU) during the said period.
However, in 2002, Fuentes, then Mayor of Isabel, refused to
sign Triple A's Business Permit, despite: (a) Valenzuela's
payment of the renewal fees; (b) all the other municipal officers
of the LGU having signed the same, thereby signifying their
approval thereto; and (c) a Police Clearance[8] certifying that
Valenzuela had no derogatory records in the municipality.
Initially, Triple A was able to carry out its business despite the
lack of the said Business Permit by securing temporary permits
with the Port Management Office as well as the Bureau of
Customs (BOC). However, Triple A's operations were shut down
when the BOC issued a Cease and Desist Order[9] after receiving
Fuentes's unnumbered Memorandum[10] alleging that
Valenzuela was involved in smuggling and drug trading. This
caused the BOC to require Valenzuela to secure a Business
Permit from the LGU in order to resume Triple A's operations.
After securing the Memorandum, Valenzuela wrote to Fuentes
pleading that she be issued a Business Permit, but the latter's
security refused to receive the same. Valenzuela likewise
obtained certifications and clearances from Isabel Chief of Police
Martin F. Tamse (Tamse),[11]Barangay Captain Dino A. Bayron,
[12]
 the Narcotics Group of Tacloban National Police Commission
(NAPOLCOM), the Philippine National Police (PNP) Isabel Police
Station, and the Police Regional Office 8 of the PNP similarly
stating that she is of good moral character, a law-abiding
citizen, and has not been charged nor convicted of any crime as
per verification from the records of the locality. Despite the
foregoing, no Business Permit was issued for Triple A, causing:
(a) the spoilage of its goods bought in early 2002 for M/V Ace
Dragon as it was prohibited from boarding the said goods to the
vessel due to lack of Business Permit; and (b) the suspension of
its operations from 2002 to 2006. In 2007, a business permit
was finally issued in Triple A's favor.[13]
In his defense, Fuentes averred that as early as 1999, 2000,
and 2001, he has been hearing rumors that Valenzuela was
engaged in illegal activities such as smuggling and drug trading,
but he did not act on the same. However, in 2002, he received
written reports from the Prime Movers for Peace and Progress
and Isabel Chief of Police Tamse allegedly confirming the said
rumors, which prompted him to hold the approval of
Valenzuela's Business Permit for Triple A, and to issue the
unnumbered Memorandum addressed to port officials and the
BOC. Fuentes maintained that if he went on with the approval
of such permit and the rumors turned out to be true, many will
suffer and will be victimized; on the other hand, if the rumors
were false, then only one stands to suffer. Further, Fuentes
presented corroborative testimonies of other people, essentially:
(a) refuting Valenzuela's claim that Triple A was unable to
resume operations due to lack of Business Permit; and (b)
accusing Valenzuela of pulling out her application for Business
Permit from the Mayor's Office, which precluded Fuentes from
approving the same.[14]
The Sandiganbayan Ruling
In a Decision[15] dated September 30, 2008,
the Sandiganbayan found Fuentes guilty beyond reasonable
doubt of the crime charged, and accordingly, sentenced him to
suffer the penalty of imprisonment for an indeterminate period
of six (6) years and one (1) month, as minimum, to ten (10)
years and six (6) months, as maximum, with perpetual
disqualification from public office, and ordered to pay
Valenzuela the amount of P200,000.00 as nominal damages.[16]
The Sandiganbayan found that the prosecution had established
all the elements of violation of Section 3 (e) of RA 3019,
considering that: (a) Fuentes was admittedly the Mayor of
Isabel, Leyte at the time relevant to the case; (b) he singled out
Valenzuela's Triple A despite the fact that the rumors relative to
the illegal smuggling and drug-related activities covered all ship
chandlers operating in the Port of Isabel; (c) he still refused to
approve Valenzuela's Business Permit for Triple A even though
she had already secured clearances not only from the other
offices of the LGU, but from the PNP itself, exculpating her from
any illegal activities; and (d) as a result of Fuentes's acts,
Valenzuela was unable to operate her ship chandling business
through Triple A, thus, causing her undue injury.[17]
Aggrieved, Fuentes moved for reconsideration, which was,
however, denied in a Resolution[18] dated February 16, 2009;
hence, this petition.
The Issue Before the Court
The primordial issue for the Court's resolution is whether or not
the Sandiganbayan correctly convicted Fuentes of the crime of
violation of Section 3 (e) of RA 3019.
The Court's Ruling
The petition is without merit. Section 3 (e) of RA 3019 states:
Section 3. Corrupt practices of public officers. - In addition to
acts or omissions of public officers already penalized by existing
law, the following shall constitute corrupt practices of any
public officer and are hereby declared to be unlawful:
xxxx
(e) Causing any undue injury to any party, including the
Government, or giving any private party any unwarranted
benefit, advantage or preference in the discharge of his official
administrative or judicial functions through manifest partiality,
evident bad faith or gross inexcusable negligence. This provision
shall apply to officers and employees of offices or government
corporations charged with the grant of licenses or permits or
other concessions.
As may be gleaned above, the elements of violation of Section 3
(e) of RA 3019 are as follows: (a) that the accused must be a
public officer discharging administrative, judicial, or official
functions (or a private individual acting in conspiracy with such
public officers); (b) that he acted with manifest partiality,
evident bad faith, or inexcusable negligence; and (c) that his
action caused any undue injury to any party, including the
government, or giving any private party unwarranted benefits,
advantage, or preference in the discharge of his functions.[19]
After a judicious review of the case, the Court is convinced that
the Sandiganbayan correctly convicted Fuentes of the crime
charged, as will be explained hereunder.
Anent the first element, it is undisputed that Fuentes was a
public officer, being the Municipal Mayor of Isabel, Leyte at the
time he committed the acts complained of.
As to the second element, it is worthy to stress that the law
provides three modes of commission of the crime, namely,
through "manifest partiality", "evident bad faith", and/or "gross
negligence." In Coloma, Jr. v. Sandiganbayan,[20] the Court
defined the foregoing terms as follows:
"Partiality" is synonymous with "bias" which "excites a
disposition to see and report matters as they are wished for
rather than as they are." "Bad faith does not simply connote
bad judgment or negligence; it imputes a dishonest purpose
or some moral obliquity and conscious doing of a wrong; a
breach of sworn duty through some motive or intent or ill
will; it partakes of the nature of fraud." "Gross negligence
has been so defined as negligence characterized by the want of
even slight care, acting or omitting to act in a situation where
there is a duty to act, not inadvertently but wilfully and
intentionally with a conscious indifference to consequences in
so far as other persons may be affected. It is the omission of
that care which even inattentive and thoughtless men never fail
to take on their own property."[21] (Emphasis and underscoring
supplied)
In other words, there is "manifest partiality" when there is a
clear, notorious, or plain inclination or predilection to favor one
side or person rather than another. On the other hand, "evident
bad faith" connotes not only bad judgment but also palpably
and patently fraudulent and dishonest purpose to do moral
obliquity or conscious wrongdoing for some perverse motive or
ill will. It contemplates a state of mind affirmatively operating
with furtive design or with some motive or self-interest or ill will
or for ulterior purposes.[22]
In the instant case, Fuentes's acts were not only committed
with manifest partiality, but also with bad faith. As can be
gleaned from the records, Fuentes himself testified that
according to the rumors he heard, all five (5) ship chandlers
operating in the Port of Isabel were allegedly involved in
smuggling and drug trading. Yet, it was only Valenzuela's
chandling operations through Triple A that was refused
issuance of a Business Permit, as evidenced by Business
Permits issued to two (2) other chandling services operators in
the said port, namely: S.E. De Guzman Ship Chandler and
General Maritime Services; and Golden Sea Kers Marine
Services. Moreover, if Fuentes truly believed that Valenzuela
was indeed engaged in illegal smuggling and drug trading, then
he would not have issued Business Permits to the latter's other
businesses as well. However, and as aptly pointed out by
the Sandiganbayan, Fuentes issued a Business Permit to
Valenzuela's other business, Gemini Security, which provides
security services to vessels in the Port of Isabel. Under these
questionable circumstances, the Court is led to believe that
Fuentes's refusal to issue a Business Permit to Valenzuela's
Triple A was indeed committed with manifest partiality against
the latter, and in favor of the other ship chandling operators in
the Port of Isabel.
As regards the issue of bad faith, while it is within the
municipal mayor's prerogative to suspend, revoke, or refuse to
issue Business Permits pursuant to Sections 16[23] and 444 (b)
(3) (iv)[24] of the Local Government Code as an incident of his
power to issue the same, it must nevertheless be emphasized
that: (a) the power to suspend or revoke is premised on the
violation of the conditions specified therein; and (b) the power to
refuse issuance is premised on non-compliance with the pre-
requisites for said issuance. In the exercise of these powers, the
mayor must observe due process in that it must afford the
applicant or licensee notice and opportunity to be heard.[25]
Here, it is clear that Valenzuela had complied with all the pre-
requisites for the issuance of a Business Permit for Triple A, as
her application already contained the prior approval of the other
concerned officials of the LGU. In fact, Valenzuela even
submitted numerous certifications issued by various law
enforcement agencies clearing her of any kind of participation
from the alleged illegal smuggling and drug trading activities in
the Port of Isabel. Despite these, Fuentes still refused to issue a
Business Permit for Valenzuela's Triple A without affording her
an opportunity to controvert the rumors against her. Worse, he
even issued the unnumbered Memorandum which effectively
barred Triple A from conducting its ship chandling operations
without a Business Permit. Quite plainly, if Fuentes truly
believed the rumors that Valenzuela was indeed engaged in
illegal activities in the Port of Isabel, then he should have
already acted upon it in the years 1999, 2000, and 2001, or
when he allegedly first heard about them. However, Fuentes's
belated action only in 2002 - which was done despite the
clearances issued by various law enforcement agencies
exonerating Valenzuela from such activities - speaks of evident
bad faith which cannot be countenanced.
Anent the third and last element, suffice it to say that
Fuentes's acts of refusing to issue a Business Permit in
Valenzuela's favor, coupled with his issuance of the
unnumbered Memorandum which effectively barred Triple A
from engaging in its ship chandling operations without such
Business Permit, caused some sort of undue injury on the part
of Valenzuela. Undeniably, such suspension of Triple A's ship
chandling operations prevented Valenzuela from engaging in an
otherwise lawful endeavor for the year 2002. To make things
worse, Valenzuela was also not issued a Business Permit for the
years 2003, 2004, 2005, and 2006, as it was only in 2007 that
such permit was issued in Triple A's favor. Under prevailing
case law, "[p]roof of the extent of damage is not essential, it
being sufficient that the injury suffered or the benefit received is
perceived to be substantial enough and not merely negligible."[26]
In view of the foregoing, Fuentes committed a violation of
Section 3 (e) of RA 3019, and hence, must be held criminally
liable therefor.
As regards the proper penalty to be imposed on Fuentes,
Section 9 (a)[27] of RA 3019 states that the prescribed penalties
for violation of the aforesaid crime includes, inter alia,
imprisonment for a period of six (6) years and one (1) month to
fifteen (15) years, and perpetual disqualification from public
office. Thus, the Sandiganbayan correctly sentenced him to
suffer the penalty of imprisonment for an indeterminate period
of six (6) years and one (1) month, as minimum, to ten (10)
years and six (6) months, as maximum, with perpetual
disqualification from public office.
Finally, the Court deems it proper to modify the award of
damages in Valenzuela's favor. To recapitulate,
the Sandiganbayan awarded her P200,000.00 as nominal
damages occasioned by Fuentes's non-issuance of a Business
Permit to Triple A. As defined under Article 2221[28] of the Civil
Code, nominal damages are "recoverable where a legal right is
technically violated and must be vindicated against an invasion
that has produced no actual present loss of any kind or
where there has been a breach of contract and no substantial
injury or actual damages whatsoever have been or can be
shown."[29] In this case, however, it is clear that Valenzuela
suffered some sort of pecuniary loss due to the suspension of
Triple A's ship chandling operations, albeit the amount thereof
was not proven with certainty. Thus, the award of temperate,
and not nominal, damages, is proper. The Court's
pronouncement in Evangelista v. Spouses Andolong[30] is
relevant on this matter:
In contrast, under Article 2224 [of the Civil Code],
temperate or moderate damages may be recovered when the
court finds that some pecuniary loss has been suffered but
its amount cannot, from the nature of the case, be provided
with certainty. This principle was thoroughly explained
in Araneta v. Bank of America [148-B Phil. 124 (1971)], which
cited the Code Commission, to wit:
The Code Commission, in explaining the concept of temperate
damages under Article 2224, makes the following comment:
In some States of the American Union, temperate damages are
allowed. There are cases where from the nature of the case,
definite proof of pecuniary loss cannot be offered, although the
court is convinced that there has been such loss. For instance,
injury to one's commercial credit or to the goodwill of a
business firm is often hard to show with certainty in terms of
money. Should damages be denied for that reason? The judge
should be empowered to calculate moderate damages in such
cases, rather than that the plaintiff should suffer, without
redress from the defendant's wrongful act.
Thus, in Tan v. OMC Carriers, Inc. [654 Phil. 443 (2011)],
temperate damages were rightly awarded because plaintiff
suffered a loss, although definitive proof of its amount cannot
be presented as the photographs produced as evidence were
deemed insufficient. Established in that case, however, was the
fact that respondent's truck was responsible for the damage to
petitioner's property and that petitioner suffered some form of
pecuniary loss. In Canada v. All Commodities Marketing
Corporation [590 Phil. 342 (2008)], temperate damages were
also awarded wherein respondent's goods did not reach the
Pepsi Cola Plant at Muntinlupa City as a result of the
negligence of petitioner in conducting its trucking and hauling
services, even if the amount of the pecuniary loss had not been
proven. In Philtranco Service Enterprises, Inc. v. Paras [686 Phil.
736 (2012)], the respondent was likewise awarded temperate
damages in an action for breach of contract of carriage, even if
his medical expenses had not been established with certainty.
In People v. Briones [398 Phil. 31 (2000)], in which the accused
was found guilty of murder, temperate damages were given even
if the funeral expenses for the victim had not been sufficiently
proven.
Given these findings, we are of the belief that temperate
and not nominal damages should have been awarded,
considering that it has been established that respondent
herein suffered a loss, even if the amount thereof cannot be
proven with certainty.
xxxx
Consequently, in computing the amount of temperate or
moderate damages, it is usually left to the discretion of the
courts, but the amount must be reasonable, bearing in mind
that temperate damages should be more than nominal but
less than compensatory.
Here, we are convinced that respondent sustained damages to
its conveyor facility due to petitioner's negligence. Nonetheless,
for failure of respondent to establish by competent evidence the
exact amount of damages it suffered, we are constrained to
award temperate damages. Considering that the lower courts
have factually established that the conveyor facility had a
remaining life of only five of its estimated total life of ten years
during the time of the collision, then the replacement cost of
P7,046,351.84 should rightly be reduced to 50% or
P3,523,175.92. This is a fair and reasonable valuation, having
taking into account the remaining useful life of the facility.
[31]
 (Emphases and underscoring supplied)
Under these circumstances, the Court holds that the award of
temperate damages in the amount of P300,000.00 is proper,
considering that Valenzuela's net income from the previous
year, 2001, was P750,000.00. Further, such amount shall earn
legal interest of six percent (6%) per annum from finality of this
Decision until fully paid, in light of prevailing jurisprudence. [32]
WHEREFORE, the petition is DENIED. The Decision dated
September 30, 2008 and the Resolution dated February 16,
2009 of the Sandiganbayan in Crim. Case No. 28342 are
hereby AFFIRMED. Petitioner Roberto P. Fuentes is
found GUILTY beyond reasonable doubt of violating Section 3
(e) of Republic Act No. 3019, entitled the "Anti-Graft and
Corrupt Practices Act," and accordingly, sentenced to suffer the
penalty of imprisonment for an indeterminate period of six (6)
years and one (1) month, as minimum, to ten (10) years and six
(6) months, as maximum, with perpetual disqualification from
public office, and is ordered to pay private complainant Fe
Nepomuceno Valenzuela the amount of P300,000.00 as
temperate damages, with legal interest of six percent (6%) per
annum from finality of this Decision until fully paid.
SO ORDERED.
Sereno, C. J., (Chairperson), Velasco, Jr.,** Del Castillo,
and Caguioa, JJ., concur.
*
 Part of the Court's Case Decongestion Program. [14]
 Id. at 75-83.
**
 Designated additional member per raffle dated June 8, 2009. [15]
 Id. at 66-104.
[1]
 Rollo, pp. 8-64. [16]
 Id. at 103.

 Id. at 66-104. Penned by Associate Justice Alexander G.

[2] [17]
 Id. at 85-102.
Gesmundo with Presiding Justice Diosdado M. Peralta (now a
member of this Court) and Associate Justice Rodolfo A. [18]
 Id. at 105-129.
Ponferrada concurring.
 See Cambe v. Ombudsman, G.R. Nos. 212014-15, December
[19]

 Id. at 105-129. Penned by Associate Justice Alexander G.

[3]
6, 2016, citing Presidential Commission on Good Government v.
Gesmundo with Associate Justices Norberto Y. Geraldez and Navarro-Gutierrez, G.R. No. 194159, October 21, 2015, 773
Rodolfo A. Ponferrada concurring. SCRA 434, 446.

 "Roberto P. Fuentes, Jr." in some parts of the records.

[4] [20]
 744 Phil. 214 (2014).
See rollo pp. 174 and 180.
 Id. at 229, citing Fonacier v. Sandiganbayan, 308 Phil. 660,
[21]

[5]
 Approved on August 17, 1960. 693-694 (1994).
[6]
 Rollo, pp. 66-67.  Uriarte v. People, 540 Phil. 474, 494 (2006); citations
[22]

omitted.
[7]
 Id. at 67.
 Section 16 of the Local Government Code reads:
[23]

[8]
 Not attached to the rollo. Section 16. General Welfare. - Every local government unit shall
exercise the powers expressly granted, those necessarily implied
[9]
 Not attached to the rollo. therefrom, as well as powers necessary, appropriate, or
incidental of its efficient and effective governance, and those
[10]
 Not attached to the rollo. which are essential to the promotion of the general welfare.
Within their respective territorial jurisdictions, local government
[11]
 See rollo, pp. 194 and 351. units shall ensure and support, among other things, the
preservation and enrichment of culture, promote health and
[12]
 See id. at 11. safety, enhance the right of the people to a balanced ecology,
encourage and support the development of appropriate and self-
[13]
 Id. at 69-75. reliant scientific and technological capabilities, improve public
morals, enhance economic prosperity and social justice,
promote full employment among their residents, maintain peace
and order, and preserve the comfort and convenience of the
inhabitants.
[24]
 Section 444 (b) (3) (iv) of the Local Government Code reads:
Section 444. The Chief Executive: Powers, Duties, Functions
and Compensation. - x x x
(b) For efficient, effective and economical governance the
purpose of which is the general welfare of the municipality and
its inhabitants pursuant to Section 16 of this Code, the
municipal mayor shall:
xxxx
(3) Initiate and maximize the generation of resources and
revenues, and apply the same to the implementation of
development plans, program objectives and priorities as
provided for under Section 18 of this Code, particularly those
resources and revenues programmed for agro-industrial
development and country-wide growth and progress and relative
thereto, shall:
xxxx
(iv) Issue licenses and permits and suspend or revoke the same
for any violation of the conditions upon which said licenses or
permits had been issued, pursuant to law or ordinance.
[25]
 See Lim v. Court of Appeals, 435 Phil. 857, 867 (2002).
 Garcia v. Sandiganbayan, 730 Phil. 521, 542 (2014),
[26]
citing Reyes v. People of the Philippines, 641 Phil. 91, 107
(2010).
[27]
 Section 9 (a) of RA 3019 reads:
Section 9. Penalties for violations. - (a) Any public officer or
private person committing any of the unlawful acts or omissions
enumerated in Sections 3, 4, 5 and 6 of this Act shall be
punished with imprisonment for not less than six years and one
month nor more than fifteen years, perpetual disqualification
from public office, and confiscation or forfeiture in favor of the
Government of any prohibited interest and unexplained wealth
manifestly out of proportion to his salary and other lawful
income.
[28]
 Article 2221 of the Civil Code reads:
Article 2221. Nominal damages are adjudicated in order that a
right of the plaintiff, which has been violated or invaded by the
defendant, may be vindicated or recognized, and not for the
purpose of indemnifying the plaintiff for any loss suffered by
him.
[29]
 Seven Brothers Shipping Corporation v. DMC-Construction
Resources, Inc., G.R. No. 193914, November 26, 2014, 743
SCRA 33, 43, citing Francisco v. Ferrer, 405 Phil. 741, 751
(2001).
[30]
 See G.R. No. 221770, November 16, 2016.
 See id., citing Seven Brothers Shipping Corporation v. DMC-
[31]
Construction Resources, Inc., G.R. No. 193914, November 26,
2014, 743 SCRA 33, 44-46; citations omitted.
[32]
 See Nacar v. Gallery Frames, 716 Phil. 267, 274-283 (2013).
 Source: Supreme Court E-Library | Date created: July 12,
2019  Decision[2] dated July 29, 2013 and Resolution[3] dated January
This page was dynamically generated by the E-Library Content
Management System
Supreme Court E-Library
of Internal Revenue (CIR), assailing the Amended
7, 2014 of the Court of Tax Appeals (CTA) En Banc in CTA EB
No. 815. The CTA En Banc reversed and set aside its earlier
decision dated January 31, 2013, which affirmed the CTA First
Division's dismissal of the claim for refund or issuance of tax
credit filed by respondent Deutsche Knowledge Services, Pte.
Ltd. (DKS) in CTA Case No. 7940 on the ground of prematurity,
and remanded the case to the court of origin for further
proceedings.

Facts

DKS is the Philippine branch of a multinational company

organized and existing under and by the virtue of the laws of
Singapore. It is licensed to do business as a regional operating
headquarters in the Philippines.

798 Phil. 91 On July 25, 2007, DKS filed its original Quarterly Value Added
Tax (VAT) Return for the 2nd quarter of CY 2007 with the
FIRST DIVISION Bureau of Internal Revenue (BIR).

[ G.R. No. 211072, November 07, 2016 ] On June 18, 2009, DKS filed with the BIR-Revenue District
Office No. 47 an Application for Tax Credits/Refunds (BIR Form
COMMISSIONER OF INTERNAL REVENUE, PETITIONER, V. No. 1914) of its excess and unutilized input VAT for the
DEUTSCHE KNOWLEDGE 2nd quarter of CY 2007 in the amount of P8,767,719.30.
SERVICES, PTE. LTD., RESPONDENT.  Subsequently, on June 30, 2009, or even before any action by
the CIR on its administrative claim, DKS filed a Petition for
DECISION Review with the CTA, docketed as CTA Case No. 7940.

Trial commenced and DKS filed its Formal Offer of Evidence on

CAGUIOA, J:  September 22, 2010, which was admitted by the CTA First
Division in a Resolution dated December 1, 2010.
Before the Court is a Petition for Review[1] on Certiorari  under
Rule 45 of the Rules of Court filed by petitioner Commissioner
Meanwhile, on October 6, 2010, while DKS's claim for refund or
tax credit was pending before the CTA First Division, this Court
promulgated Commissioner of Internal Revenue v. Aichi Forging
Company of Asia, Inc.[4] (Aichi). In that case, the Court held that
compliance with the 120-day period granted to the CIR, within
which to act on an administrative claim for refund or credit of
unutilized input VAT, as provided under Section 112(C) of the
National Internal Revenue Code (NIRC) of 1997, as amended, is
mandatory and jurisdictional in filing an appeal with the CTA.
On February 21, 2011, the CIR filed a Motion to Dismiss,
[5]
 stating that the CTA First Division lacked jurisdiction
because respondent's Petition for Review was prematurely filed.
In a Resolution dated April 26, 2011,[6] the CTA First Division
dismissed respondent's judicial claim, the decretal portion of
which reads:
WHEREFORE, premises considered, the Motion to Dismiss
dated February 21, 2011, filed by respondent [CIR], is hereby
GRANTED. Consequently, the Petition for Review dated June
30, 2009, filed by petitioner Deutsche Knowledge Services Pte.
Ltd. is hereby DISMISSED.
SO ORDERED.[7]
The CTA First Division ruled that the petition for review filed by
DKS on June 30, 2009, or barely twelve (12) days after the filing
of its administrative claim for refund, was clearly premature
justifying its dismissal. The CTA First Division explained that
pursuant to Section 112(C) of the NIRC and the jurisprudence
laid down in Aichi, it is a mandatory requirement to wait for the
lapse of the 120-day period granted to petitioner to act on the
application for refund or issuance of tax credit, before a judicial
claim may be filed with the CTA.
DKS moved for reconsideration, but the same was denied by the
CTA First Division in its Resolution[8] dated August 2, 2011.
Aggrieved, DKS elevated the matter to the CTA En Banc, raising
the following arguments: (1) the CTA First Division validly
acquired jurisdiction of its judicial claim for refund;
(2) Aichi should not be applied indiscriminately to all claims for
VAT refund; (3) the prospective application of
the Aichi interpretation on the observance of the 120-day rule is
legally and equitably imperative; and (4) DKS is entitled to a
refund of its claimed input VAT for the 2nd quarter of CY 2007.
On January 31, 2013, the CTA En Banc rendered a
Decision[9] affirming the April 26, 2011 and August 2, 2011
Resolutions of the CTA First Division. It agreed with the CTA
First Division in applying the ruling in Aichi which warranted
the dismissal of DKS's judicial claim for refund on the ground of
prematurity.
In the meantime, on February 12, 2013, this Court decided the
consolidated cases of Commissioner of Internal Revenue v. San
Roque Power Corporation, Taganito Mining Corporation v.
Commissioner of Internal Revenue, and Philex Mining
Corporation v. Commissioner of Internal Revenue [10] (San Roque),
wherein the Court recognized BIR Ruling No. DA-489-03 as an
exception to the 120-day period.
Invoking this Court's pronouncements in San Roque, DKS
moved for reconsideration. The CTA En Banc found merit in
said motion and rendered the assailed Amended Decision, the
dispositive portion of which reads as follows:
WHEREFORE, premises considered, the instant Motion for
Reconsideration (Re: Decision dated January 31, 2013) is
hereby GRANTED. The Decision dated January 31, 2013,
which affirmed the CTA First Division's dismissal of the Petition
for Review docketed as CTA Case No. 7940 on the ground of
prematurity, is hereby REVERSED AND SET ASIDE.
Accordingly, CTA Case No. 7940 is hereby REMANDED to the
court of origin for further proceedings.
SO ORDERED.[11]
The CIR filed a Motion for Reconsideration but the motion was
denied for lack of merit by the CTA En Banc in its
Resolution[12] dated January 7, 2014.
Hence, this petition.
Issue
The singular issue submitted by the Petition for this Court's
resolution is whether the CTA En Banc erred in taking
cognizance of the case and holding that DKS's petition for
review was not prematurely filed with the CTA First Division.
The Court's Ruling
The Petition lacks merit.
Exception to the mandatory and
jurisdictional nature of the 120-day period  Based on the plain language of the foregoing provision, a VAT
under Section 112(C) of the NIRC
Section 112 of the NIRC provides for the rules on claiming
refunds or tax credits of unutilized input VAT, the pertinent
portions of which read as follows:
Sec. 112. Refunds or Tax Credits of Input Tax.-
(A) Zero-rated or Effectively Zero-rated Sales. - Any VAT-
registered person, whose sales are zero-rated or effectively zero-
rated may, within two (2) years after the close of the taxable
quarter when the sales were made, apply for the issuance of a
tax credit certificate or refund of creditable input tax due or
paid attributable to such sales, except transitional input tax, to
the extent that such input tax has not been applied against
output tax: x x x
xxxx
(C) Period within which Refund or Tax Credit of Input Taxes shall
be Made. - In proper cases, the Commissioner shall grant a
refund or issue the tax credit certificate for creditable input
taxes within one hundred twenty (120) days from the date
of submission of complete documents in support of the
application filed in accordance with Subsection (A) hereof.
In case of full or partial denial of the claim for tax refund or tax
credit, or the failure on the part of the Commissioner to act on
the application within the period prescribed above, the taxpayer
affected may, within thirty (30) days from the receipt of the
decision denying the claim or after the expiration of the one
hundred twenty-day period, appeal the decision or the unacted
claim with the Court of Tax Appeals. (Emphasis supplied)
registered taxpayer claiming for a refund or tax credit of its
excess and unutilized input VAT must file an administrative
claim within two (2) years from the close of the taxable quarter
when the sales are made. After that, the CIR is given 120 days,
from the submission of complete documents in support of said
administrative claim, within which to grant or deny said claim.
Upon receipt of CIR's decision, denying the claim in full or
partially, or upon the expiration of the 120-day period without
action from the CIR, the taxpayer has 30 days within which to
file a petition for review with the CTA.
As earlier stated, this Court in Aichi clarified that the 120-day
period granted to the CIR is mandatory and jurisdictional, the
non-observance of which is fatal to the filing of a judicial claim
with the CTA. The Court further explained that the two (2)-year
prescriptive period under Section 112(A) of the NIRC pertains
only to the filing of the administrative claim with the BIR; while
the judicial claim may be filed with the CTA within 30 days from
the receipt of the decision of the CIR or expiration of 120-day
period of the CIR to act on the claim. Thus:
Section 112 (D) of the NIRC clearly provides that the CIR
has "120 days, from the date of the submission of the
complete documents in support of the application [for tax
refund/credit]," within which to grant or deny the claim. In
case of full or partial denial by the CIR, the taxpayer's recourse
is to file an appeal before the CTA within 30 days from receipt of
the decision of the CIR. However, if after the 120-day period
the CIR fails to act on the application for tax refund/credit,
the remedy of the taxpayer is to appeal the inaction of the
CIR to CTA within 30 days.
In this case, the administrative and the judicial claims were
simultaneously filed on September 30, 2004. Obviously,
respondent did not wait for the decision of the CIR or the lapse
of the 120-day period. For this reason, we find the filing of the
judicial claim with the CTA premature.
Respondent's assertion that the non-observance of the 120-day
period is not fatal to the filing of a judicial claim as long as both
the administrative and the judicial claims are filed within the
two-year prescriptive period has no legal basis.
There is nothing in Section 112 of the NIRC to support
respondent's view. Subsection (A) of the said provision states
that "any VAT-registered person, whose sales are zero-rated or
effectively zero-rated may, within two years after the close of the
taxable quarter when the sales were made, apply for the
issuance of a tax credit certificate or refund of creditable input
tax due or paid attributable to such sales." The phrase "within
two (2) years x x x apply for the issuance of a tax credit
certificate or refund" refers to applications for refund/credit
filed with the CIR and not to appeals made to the CTA. This is
apparent in the first paragraph of subsection (D) of the same
provision, which states that the CIR has "120 days from the
submission of complete documents in support of the application
filed in accordance with Subsections (A) and (B)" within which
to decide on the claim.
In fact, applying the two-year period to judicial claims would
render nugatory Section 112(D) of the NIRC, which already
provides for a specific period within which a taxpayer should
appeal the decision or inaction of the CIR. The second
paragraph of Section 112(D) of the NIRC envisions two
scenarios: (1) when a decision is issued by the CIR before the
lapse of the 120-day period; and (2) when no decision is made
after the 120-day period. In both instances, the taxpayer has 30
days within which to file an appeal with the CTA. As we see it
then, the 120-day period is crucial in filing an appeal with
the CTA.
xxxx
In fine, the premature filing of respondent's claim for
refund/credit of input VAT before the CTA warrants a dismissal
inasmuch as no jurisdiction was acquired by the CTA.
[13]
 (Emphasis supplied)
Subsequently, in San Roque, while the Court reiterated the
mandatory and jurisdictional nature of the 120+30 day periods,
it recognized as an exception BIR Ruling No. DA-489-03, issued
prior to the promulgation of Aichi, where the BIR expressly
allowed the filing of judicial claims with the CTA even before the
lapse of the 120-day period. The Court held that BIR Ruling No.
DA-489-03 furnishes a valid basis to hold the CIR in estoppel
because the CIR had misled taxpayers into filing judicial claims
before the CTA even before the lapse of the 120-day period:
There is no dispute that the 120-day period is mandatory and
jurisdictional, and that the CTA does not acquire jurisdiction
over a judicial claim that is filed before the expiration of the
120-day period. There are, however, two exceptions to this rule.
The first exception is if the Commissioner, through a specific
ruling, misleads a particular taxpayer to prematurely file a
judicial claim with the CTA. Such specific ruling is applicable
only to such particular taxpayer. The second exception is where
the Commissioner,through a general interpretative rule issued
under Section 4 of the Tax Code, misleads all taxpayers into
filing prematurely judicial claims with the CTA. In these cases,
the Commissioner cannot be allowed to later on question the
CTA's assumption of jurisdiction over such claim since
equitable estoppel has set in as expressly authorized under
Section 246 of the Tax Code.
xxxx
BIR Ruling No. DA-489-03 is a general interpretative rule
because it was a response to a query made, not by a particular
taxpayer, but by a government agency tasked with processing
tax refunds and credits, that is, the One Stop Shop Inter-
Agency Tax Credit and Drawback Center of the Department
of Finance. This government agency is also the addressee, or
the entity responded to, in BIR Ruling No. DA-489-03. Thus,
while this government agency mentions in its query to the
Commissioner the administrative claim of Lazi Bay Resources
Development, Inc., the agency was in fact asking the
Commissioner what to do in cases like the tax claim of Lazi Bay
Resources Development, Inc., where the taxpayer did not wait
for the lapse of the 120-day period.
Clearly, BIR Ruling No. DA-489-03 is a general
interpretative rule. Thus, all taxpayers can rely on BIR
Ruling No. DA-489-03 from the time of its issuance on 10
December 2003 up to its reversal by this Court in  Aichi on
6 October 2010, where this Court held that the 120+30 day
periods are mandatory and jurisdictional.[14] (Emphasis
supplied)
Following San Roque, the Court, in a catena of cases,[15] has
consistently adopted the rule that the 120-day waiting period
does not apply to claims for refund that were prematurely filed
during the period from the issuance of BIR Ruling No. DA-489-
03 on December 10, 2003, until October 6, 2010, when
the Aichi was promulgated; but before and after said period,
the observance of the 120-day period is mandatory and
jurisdictional.[16]
In this case, records show that DKS filed its administrative and
judicial claim for refund on June 18, 2009 and June 30, 2009,
respectively, or after the issuance of BIR Ruling No. DA-489-03,
but before the date when Aichi was promulgated. Thus, even
though DKS filed its judicial claim without waiting for the
expiration of the 120-day mandatory period, the CTA may still
take cognizance of the case because the claim was filed within
the excepted period stated in San Roque. Verily, the CTA En
Banc did not err in reversing the dismissal of DKS's judicial
claim and remanding the case to the CTA First Division for the
resolution of the case on the merits.
Application and validity of BIR Ruling No.  the 120-day waiting period under Section 112 of the NIRC.
DA-489-03
The CIR now claims that BIR Ruling No. DA-489-03 is invalid
because it was merely issued by a Deputy Commissioner and
not by the CIR, who is exclusively authorized by law to interpret
the provisions of the NIRC.
The Court is not persuaded. The Court  En Banc's Resolution
in San Roque dated October 8, 2013[17] is instructive:
In asking this Court to disallow Taganito's claim for tax refund
or credit, the CIR repudiates the validity of the issuance of its
own BIR Ruling No. DA-489-03. "Taganito cannot rely on the
pronouncements in BIR Ruling No. DA-489-03, being a mere
issuance of a Deputy Commissioner.
Although Section 4 of the 1997 Tax Code provides that the
"power to interpret the provisions of this Code and other tax
laws shall be under the exclusive and original jurisdiction of the
Commissioner, subject to review by the Secretary of Finance,"
Section 7 of the same Code does not prohibit the delegation of
such power. Thus, "[t]he Commissioner may delegate the
powers vested in him under the pertinent provisions of this
Code to any or such subordinate officials with the rank
equivalent to a division chief or higher, subject to such
limitations and restrictions as may be imposed under rules and
regulations to be promulgated by the Secretary of Finance,
upon recommendation of the Commissioner."[18]
Finally, the CIR contends that even assuming that BIR Ruling
No. DA-489-03 should be considered as an exception to the
120-day period; it was already repealed and superseded on
November 1, 2005 by Revenue Regulations No. 16-2005 (RR 16-
2005), which echoed the mandatory and jurisdictional nature of
Thus, DKS cannot rely on BIR Ruling No. DA-489-03 because
its claim was filed in June 2009 or almost four (4) years since
RR 16-2005 took effect.
In other words, the CIR posits that compliance with the 120-day
period should only be considered permissible from December
10, 2003, when BIR Ruling No. DA-489-03 was issued, until
October 31, 2005, prior to the effectivity of RR 16-2005.
The Court disagrees.
Again, it has already been settled in San Roque that BIR Ruling
No. DA-489-03 is a general interpretative rule
which all taxpayers may rely upon from the time of its issuance
on December 10, 2003 until its effective reversal by the Court
in Aichi. While RR 16-2005 may have re-established the
necessity of the 120-day period, taxpayers cannot be faulted for
still relying on BIR Ruling DA-489-03 even after the issuance of
RR 16-2005 because the issue on the mandatory compliance of
the 120-day period was only brought before the Court and
resolved with finality in Aichi.
All told, the Court maintains that the 120-day period is
permissible from December 10, 2003, when BIR Ruling No. DA-
489-03 was issued, until October 6, 2010, when Aichi was
promulgated; but before and after said period, the observance of
the 120-day period is mandatory and jurisdictional.
WHEREFORE, premises considered, the instant petition for
review is hereby DENIED. The Amended Decision dated July 29,
2013 and the Resolution dated January 7, 2014 of the CTA En
Banc in CTA EB No. 815 are hereby AFFIRMED. Let this case
be REMANDED to the CTA First Division for the proper
determination of the refundable amount due to respondent, if
any.
SO ORDERED.
Sereno, C.J., (Chairperson), Leonardo-De Castro, Bersamin,
and Perlas-Bernabe, JJ., concur.  [11]
[1]
 Rollo, pp. 1027.
 Id. at 34-44. Penned by Associate Justice Amelia R.
[2]
Cotangco-Manalastas with Presiding Justice Roman G. Del
Rosario and Associate Justices Juanito C. Castañeda, Jr.,
Erlinda P. Uy, Esperanza R. Fabon-Victorino and Ma. Belen M.
Ringpis-Liban, concurring; Associate Justice Caesar A.
Casanova, dissenting; and Associate Justices Lovell R. Bautista
and Cielito N. Mindaro-Grulla, on leave.
 Id. at 47-53. Penned by Associate Justice Amelia R.
[3]
Cotangco-Manalastas with Presiding Justice Roman G. Del
Rosario and Associate Justices Juanito C. Castañeda, Jr.,
Lovell R. Bautista, Erlinda P. Uy, Caesar A. Casanova,
Esperanza R. Pabon-Victorino, Cielito N. Mindaro-Grulla and
Ma. Belen M. Ringpis-Liban, concurring.
[4]
 646 Phil. 710 (2010).
[5]
 Rollo, pp. 54-60.
 Id. at 62-74. Penned by Associate Justice Esperanza R.
[6]
Pabon-Victorino with Associate Justice Erlinda P. Uy,
concurring and Presiding Justice Ernesto D. Acosta on leave.
[7]
 Id. at 74.
[8]
 Rollo, pp. 77-99.
[9]
 Id. at 102-113.
[10]
 703 Phi1. 310 (2013).
 Supra note 2, at 43.
[12]
 Supra note 3.
[13]
 Supra note 4, at 731-732.
[14]
 Supra note 10, at 373-376.
 See Commissioner of Internal Revenue v. Toledo Power
[15]
Company, G.R. Nos. 195175 & 199645, August 10, 2015, 765
SCRA 511; Commissioner of Internal Revenue v. Air Liquide
Philippines, Inc., G.R. No. 210646, July 29, 2015, 764 SCRA
385;  Silicon Philippines, Inc. (formerly Intel Philippines
Manufacturing, Inc.) v. Commissioner of Internal Revenue, G.R.
No. 173241, March 25,2015, 754 SCRA 279; Cargill Philippines,
Inc. v. Commissioner of Internal Revenue, G.R. No. 203774,
March 11, 2015, 753 SCRA 124; Panay Power
Corporation(formerly Avon River Power Holdings Corporation) v.
Commissioner of Internal Revenue, G.R. No. 203351, January
21, 2015, 746 SCRA 588; Rohm Apollo Semiconductor
Philippines v. Commissioner of Internal Revenue, G.R. No.
168950, January 14, 2015, 745 SCRA 663; Mindanao II
Geothermal Partnership v. Commissioner of Internal Revenue,
G.R. No. 204745, December 8, 2014, 744 SCRA 143; CBK
Power Company Limited v. Commissioner of Internal Revenue,
G.R. No. 198928, December 3, 2014, 743 SCRA 693; Taganito
Mining Corporation v. Commissioner of Internal Revenue, G.R.
No. 198076, November 19, 2014, 741 SCRA 196; Commissioner
of Internal Revenue v. Burmeister and Wain Scandinavian
Contractor Mindanao, Inc., G.R. No. 190021, October 22, 2014, Source: Supreme Court E-Library | Date created: October 22,
739 SCRA 147; CBK Power Company Limited v. Commissioner of 2018 
Internal Revenue, 744 Phil. 559 (2014); San Roque Power Corp. This page was dynamically generated by the E-Library Content
v. Commissioner of Internal Revenue, 737 Phil. 387 Management System
(2014); Miramar Fish Company, Inc. v. Commissioner of Internal
Revenue, G.R. No. 185432, June 4, 2014, 724 SCRA
611; Silicon Philippines, Inc. v. Commissioner of Internal Supreme Court E-Library
Revenue, 727 Phil. 487 (2014); Commissioner of Internal
Revenue v. Team Sual Corporation, 726 Phil. 266
(2014); Commissioner of Internal Revenue. v. Toledo Power, Inc.,
725 Phil. 66 (2014); Commissioner of Internal Revenue v.
Mindanao II Geothermal Partnership, 724 Phil. 534 (2014); Team
Energy Corp. v. Commissioner of Internal Revenue, 724 Phil. 127
(2014); Commissioner of Internal Revenue v. Visayas Geothermal
Power Company, Inc., 720 Phil. 710 (2013); Nippon Express
(Phils.) Corp. v. Commissioner of Internal Revenue, 706 Phil. 442
(2013).

 Taganito Mining Corporation v. Commissioner of Internal

[16]

Revenue, 736 Phil. 591, 600 (2014).

 Commissioner of Internal Revenue v. San Roque Power Corp.,

[17]

719 Phil. 137 (2013).

[18]
 Id. at 163-164.
 PER CURIAM: 

A judge should know, or ought to know, his or her role as a

solemnizing officer.

This disbarment complaint is an offshoot of our Decision

in Office of the Court Administrator v. Judge Necessario, et al.
[1]
 Respondent Former Judge Rosabella M. Tormis (Tormis),
together with other judges and employees of the Municipal Trial
Court in Cities, Cebu City, was dismissed for turning the
solemnization of marriages into a business.[2] Tormis was
dismissed from the service for the second time, and this Court
directed the Office of the Bar Confidant to initiate disbarment
proceedings against her.

On July 3, 2007, Atty. Rullyn Garcia, Region 7 Judicial

Supervisor, led the judicial audit-team created by the Office of
the Court Administrator to investigate Branches 2, 3, 4, and 8
of the Municipal Trial Court in Cities of Cebu City for alleged
794 Phil. 1 misdeeds in the solemnization of marriages.[3]

EN BANC Two (2) undercover agents from the judicial audit team, posing
as a couple, went to the Palace of Justice to ask about the
[ A.C. No. 9920 [Formerly A.M. No. MTJ-07- marriage application process.[4] They were told by the guard on
1691], August 30, 2016 ] duty to go to Branch 4 and look for a certain "Meloy."[5]

OFFICE OF THE COURT ADMINISTRATOR, COMPLAINANT, Fearing that the male undercover would be recognized by the
VS. FORMER JUDGE ROSABELLA M. TORMIS, court employees in Branch 4, the two agreed that only the
RESPONDENT. female undercover would go inside the court.[6] She was then
assisted by a woman named Helen. Helen assured the female
RESOLUTION undercover that their marriage process could be hurried.[7] She
also claimed that it was possible for the marriage to be
solemnized the next day, but the marriage certificate would only
be dated when the marriage license became available.[8]
The Office of the Court Administrator found that the respondent
judges in that case connived with the court personnel, who
acted as "fixers" in solemnizing marriages.[9] The judges
heedlessly kept solemnizing marriages despite irregularities in
the requirements provided under the law.[10]
In the Resolution dated July 10, 2007, this Court treated the
judicial audit team's memorandum as an administrative
complaint against the respondent judges, including Tormis.
[11]
 The judges were directed to file their comments on the
charges against them.[12] They were also suspended pending
resolution of the case.[13]
On August 24, 2007, Senior Deputy Court Administrator
Zenaida N. Elepano of the Office of the Court Administrator
submitted a Memorandum dated August 29, 2007 and
Supplemental Report.[14] The Report stated that:
Six hundred forty-three (643) marriage certificates were
examined by the judicial audit team. The team reported that out
of the 643 marriage certificates examined, 280 marriages were
solemnized under Article 34 of the Family Code. The logbooks of
the MTCC Branches indicate a higher number of solemnized
marriages than the number of marriage certificates in the
courts' custody. There is also an unusual number of marriage
licenses obtained from the local civil registrars of the towns of
Barili and Liloan, Cebu. There were even marriages solemnized
at 9 a.m. with marriage licenses obtained on the same day. The
town of Barili, Cebu is more than sixty (60) kilometers away
from Cebu City and entails a travel time of almost two (2) hours.
Liloan, Cebu, on the other hand, is more than ten (10)
kilometers away from Cebu City.[15] (Citations omitted)
The Report included the court employees' admissions of their
participation in the alleged misdeeds. The following personnel
substantiated the charges against Tormis:
(1) Celeste P. Retuya, Clerk III of Branch 6 of the Municipal
Trial Court in.Cities, Cebu City, confirmed that she would
personally assist couples who wished to be married by
checking that their documents were complete before
referring them to the judges, including Tormis;[16]
(2) Corazon P. Retuya, Court Stenographer of Branch 6 of the
Municipal Trial Court in Cities, Cebu City, "narrated several
anomalies involving foreign nationals and their acquisition of
marriage licenses from the local civil registrar of Barili, Cebu
despite the fact that parties were not residents of
Barili."[17] These marriages were solemnized by Tormis;[18]
(3) Rhona F. Rodriguez, Administrative Officer I of the Office of
the Clerk of Court of the Regional Trial Court, Cebu City,
would aid couples in the solemnization of their marriages by
referring them to the judges;[19]
(4) Emma D. Valencia, Court Stenographer III of Branch 18 of
the Regional Trial Court, Cebu City, "admitted that she
assisted couples seeking to get married and that most of the
marriage licenses were obtained from the local civil registrar
of Barili and Liloan, Cebu because the registrars in those
towns were not strict about couples' attendance in the family
planning seminar";[20]
(5) Marilou Cabañez, Court Stenographer of Branch 4 of the
Municipal Trial Court in Cities, Cebu City, admitted that she
would assist couples and refer them to the judges, including
Tormis.[21] She added that "during the 8th, 18th, and 28th of
the month, seven (7) to eight (8) couples would go directly to
Judge Rosabella M. Tormis for a fifteen-minute marriage
solemnization";[22]
(6) Rebecca L. Alesna, Court Interpreter of Branch 1 of the
Municipal Trial Court in Cities, Cebu City, admitted that
"she usually referred couples to Judges Necessario or
 Tormis. Couples who wanted to get married under Article 34
of the Family Code were advised to buy a pro-forma affidavit
of joint cohabitation for ten pesos (P10)";[23] and
(7) Filomena C. Lopez, Local Civil Registrar of Barili, Cebu,
admitted that she did not examine marriage applications.
[24]
 Couples who were not Barili residents could obtain a
marriage license from her, provided that they had relatives
residing in Barili;[25]
Affidavits of private individuals were also attached to the
records.[26] Among these individuals was Jacqui Lou Baguio-
Manera (Baguio-Manera), a resident of Panagdait, Mabolo,
Cebu. Baguio-Manera claimed that her marriage was
solemnized by Tormis with the aid of "Meloy," who asked for a
fee of P1,500.00.[27] She and her then fiance were not required to
present a marriage license; they were only directed to bring
their birth certificates.[28] She averred that while Article 34[29] did
not apply to them, their marriage certificate was marked with
the annotation, "No marriage license was necessary, the
marriage being solemnized under Article 34 of Executive Order
No. 209."[30]
On November 27, 2007, this Court En Banc issued the
Resolution requiring all the judges involved, including Tormis,
to comment on the Supplemental Report.[31] The Resolution also
directed the Process Servicing Unit to furnish all the judges
with a copy of the Report.[32]Further, all the court personnel
involved were asked to show cause why they should not be
disciplined for their misconduct.[33]
In her comment, Tormis denied the charges against her.[34] She
claimed that the action of the Office of the Court Administrator
was an "entrapment."[35] According to her, there was nothing
wrong with solemnizing marriages on the same date the
marriage license was issued.[36]In view of the pro forma affidavits
of cohabitation, she relied on the presumption of regularity.
[37]
 Tormis asserted that she should not be blamed for assuming
that the affidavits were true since judges are not handwriting
experts.[38]
Tormis also claimed that Baguio-Manera's affidavit was
hearsay.[39] She averred that when Baguio-Manera and her
husband was asked about the affidavit, they confirmed the
truthfulness of their statements, particularly that they had been
living together for five (5) years.[40] Lastly, Tormis blamed the
filing clerks for the irregularities in the number of marriages
solemnized in her sala.[41]
On November 12, 2007, Tormis, together with Judge Edgemelo
C. Rosales, filed a Memorandum of Law with Plea for Early
Resolution, Lifting of Suspension and Dismissal of the Case.
[42]
 This Court lifted the suspension of the judges but forbade
them from solemnizing marriages.[43]
On December 7, 2007, both judges moved for early resolution
with a waiver of formal and/or further investigation and to
dismiss.[44] This Court noted their Motion and affirmed the relief
they sought, thus allowing the payment of the judges' unpaid
salaries and benefits from July 9, 2007.[45]
The Office of the Court Administrator, through a memorandum
dated June 15, 2010, found Tormis guilty of
gross inefficiency or neglect of duty for solemnizing marriages
with questionable documents, for failure to make sure that the
solemnization fee has been paid, for solemnizing marriages
wherein one of the contracting parties is a foreigner who
submitted a mere affidavit of his capacity to marry in lieu of the
required certificate from the embassy and for solemnizing a
marriage with an expired license.[46]
This Court upheld the findings of the Office of the Court
Administrator and noted the individual liability of the judges:
Liability of Judge Rosabella M. Tormis
Judge Tormis solemnized a total of one hundred eighty-one
(181) marriages from 2003 to 2007 based on the marriage
certificates actually examined. However, the monthly report of
cases showed that she solemnized three hundred five (305)
marriages instead for the years 2004 to 2007. The OCA report
also noted that it was only in July 2007 that her court started
to use a logbook to keep track of marriages.
Respondent judge solemnized thirty-seven (37) marriages with
incomplete or missing documents such as the marriage license,
certificate of legal capacity to marry, and the joint affidavit of
cohabitation. In several instances, only affidavits were
submitted by the foreign parties in lieu of the certificate of legal
capacity to marry.
Judge Tormis solemnized thirteen (13) marriages despite the
questionable character of the validity of the required documents
particularly the marriage license. The judicial audit team found
numerous erasures and superimpositions on entries with
regard to the parties' place of residence. In one instance, the
judge solemnized the marriage of Rex Randy E. Cujardo and
Anselma B. Laranio on 28 December 2006 despite the marriage
license containing a rubberstamp mark saying, "THIS LICENSE
EXPIRES ON" and a handwritten note saying "12/28/06" under
it.
The judge solemnized a total of forty-seven (47) marriages under
Article 34 of the Family Code wherein the marriage
requirements' authenticity was doubtful due to the
circumstances of the cohabitation of the parties and the given
address of the parties. These irregularities were evident in the
case of 22-year-old John Rey R. Tibalan and Ana Liza Secuya
who were married on 25 May 2007. The residential address of
the couple in the marriage certificate is "Sitio Bamboo, Buhisan,
Cebu City." Flowever, there was an application for marriage
license attached to the marriage certificate showing that
Secuya's address is "F. Lopez Comp. Morga St., Cebu City."[47]
This Court ruled that:
3. Judge Rosabella M. Tormis, Presiding Judge,
Municipal Trial Court in Cities, Branch 4, Cebu City,
GUILTY of gross inefficiency or neglect of duty and of
gross ignorance of the law and that she would have
been DISMISSED FROM THE SERVICE with forfeiture
of her retirement benefits, except leave credits, if any,
and disqualified from reinstatement or appointment to
any public office, including government-owned or
-controlled corporation, had she not been previously
dismissed from service in A.M. No. MTJ-12-1817
(Formerly A.M. No. 09-2-30-MTCC);
....
The case against Judge Rosabella M. Tormis, including the
sworn statements of Celerina Plaza and Crisanto dela Cerna,
should be REFERRED to the Office of the Bar Confidant for the
purpose of initiating disbarment proceedings against the judge.
[48]
(Emphasis in the original)
The affidavits of Celerina Plaza (Plaza) and Crisanto Dela Cerna
(Dela Cerna) resulted from Marilou Cabañes' (Cabañes) and
Helen Mongaya's (Mongaya) separate supplemental comments
on the charges against them.[49] Cabañes, then Court
Stenographer of Branch 4, named Plaza as Tormis' assistant, in
charge of meeting couples at their lobby.[50] On the other hand,
Mongaya, then Court Interpreter of Branch 4, attached Dela
Cerna's affidavit to her comment.[51]
Plaza claimed to be Tormis' personal aide since 2002.[52] She
alleged that after Tormis' suspension in 2006, she was directed
to find couples who wanted to get married.[53] She was also told
to direct the parties to Branch 4 and find Cabañes or "Meloy." [54]
In his affidavit, Dela Cerna stated that he was employed as
Tormis' personal aide.[55] He claimed that during the
investigation, Tormis directed him and Tormis' children to bring
all the marriage certificates from her office to her house. [56]
In view of Judge Necessario, et al., the Office of the Bar
Confidant recommended that the case be docketed as A.C. No.
9920 (Formerly A.M. No. MTJ-07-1691) and entitled Office of
the Court Administrator v. Former Judge Rosabella M. Tormis.[57]
On June 18, 2013, this Court approved the docketing of the
case and directed respondent Former Judge Rosabella M.
Tormis to comment on the disbarment charge against her.[58]
Respondent filed an Urgent Motion for Clarification[59] dated
August 12, 2013 asking the Office of the Court Administrator to
state the particular Canons of the Code of Professional
Responsibility that she had violated as basis for her
disbarment.
In the Resolution[60] dated September 10, 2013, this Court noted
the Urgent Motion for Clarification and directed the Office of the
Bar Confidant to inform respondent of the particular Canons
that she had violated.
On November 29, 2013, the Office of the Bar Confidant sent
respondent a letter informing her that the charges in her
administrative cases as a judge were the grounds for her
disbarment.[61] It cited A.M. No. 02-9-02-SC,[62] which provides
that administrative cases against judges shall also be
considered as disciplinary charges against them as members of
the bar.[63] Some administrative cases against judges stand on
grounds that similarly violate the Lawyer's Oath, the Code of
Professional Responsibility, and the Canons of Professional
Ethics, or on other breaches long recognized as grounds for
discipline of lawyers. The Office of the Bar Confident reiterated
that, in those cases, the respondent judge may be directed to
comment on the complaint and explain why he or she should
not be punished as a member of the bar.[64]
The letter cited the previous administrative charges against
respondent, thus:
(a) A.M. No. MTJ-07-1691,[65] where respondent was dismissed
from service, had she not been previously dismissed from
service in A.M. No. MTJ-12-1817[66] for gross inefficiency or
neglect of duty and gross ignorance of the law by turning
solemnization of marriage into a business;[67]
(b) A.M. No. MTJ-07-1692,[68] where respondent was suspended
for six (6) months without salary for gross misconduct for
repeatedly disregarding the directives of this Court to
furnish the complainant with her comment;[69]
(c) A.M. No. 04-7-373-RTC[70] and A.M. No. 04-7-374-RTC,
[71]
 where respondent was fined P5,000.00 for gross violation
of Rule 114, Section 17[72] of the Revised Rules of Criminal
Procedure by inappropriately approving the bail posted by an
accused in a criminal case;[73]
(d) A.M. No. MTJ-05-1609,[74] where respondent was severely
reprimanded for her "unauthorized receipt of cash bond and
keeping the same in her house";[75]
(e) A.M. No. MTJ-12-1817,[76] where respondent was dismissed
from service for gross inefficiency, violation of Supreme
Court rules, directives and circulars, and gross ignorance of
the law;[77] and
(f) AM. No. MTJ-001337,[78] where respondent was
 reprimanded after being found "guilty of improper conduct
for trying to influence the course of litigation in Criminal
Case No. 99796- 12."[79] She, together with another judge,
was admonished for her "unbecoming conduct as dispensers
of justice."[80]
Respondent filed her one-page Comment[81] on January 10,
2014, asking this Court to grant her peace of mind.[82] She
states that she is adopting her Motion for Reconsideration[83] in
A.M. No. MTJ-12-1817 as her Comment on the disbarment case
against her.[84] In this Motion, respondent enumerates her
previous administrative cases with her justifications.
For A.M. No. MTJ-07-1692, respondent claims that she had
furnished the complainant with a copy of her comment three (3)
times.[85] She avers that the complainant even acknowledged the
receipt of her comment through her manifestation, as noted in
this Court's July 30, 2003 Resolution.[86] Despite this, she was
still fined P2,000.00 for her repeated defiance to this Court's
directive to furnish the complainant with a copy of her
comment.[87] She believed that the case ended upon resolution
and upon this Court's noting her payment of the fine. However,
she claims that:
[The Supreme Court] made an underground evaluation of the
case and made it appear that when she complied with their
Resolution in 2 March 2005 to impose a fine of P2,000.00, it
was already an admission that "[s]he (respondent) refused to
present proof of service to complainant of her Comment or she
did not furnish complainant with said document[.]"[88]
For A.M. No. 04-7-373-RTC and A.M. No. 04-7-374-RTC,
respondent claims that this Court "obviously ignored" her
explanation.[89] She asserts that she was the only available judge
at that time since she was working from Mondays through
Saturdays and even Sundays due to her load of cases.[90]
For A.M. No. MTJ-05-1609, respondent questions why this
Court ruled that she deliberately made untruthful statements in
her Comment with the intent to deceive this Court.[91]
For A.M. No. MTJ-12-1817, respondent claims that the audit
was conducted one (1) day after she had served a prior
suspension.[92] She argues that since she was not in her court
for a long time, she cannot be faulted for knowing nothing
about what has been happening in her sala during her absence.
[93]
 She alleges that the Clerk of Court, her co-respondent in the
case, "could have manipulated it so that even if the cases had
already been disposed of some years back he made it appear
that this had remained unacted upon."[94]
For A.M. No. MTJ-001337, respondent claims that the
dismissal of the judges was based on an alleged "entrapment."
She argues that it was impossible for her to act on the marriage
of the undercover agents because she was in Tacloban City for
her high school reunion.[95] She was merely indicted based on
the statements of Plaza and Dela Cerna, who had been
intimidated by Atty. Rullyn Garcia, Office of the Court
Administrator judicial audit team head.[96]
On March 18, 2014, this Court noted respondent's Comment
and resolved to refer the case to the Office of the Bar Confidant
for investigation, report, and recommendation.[97]
In its Report and Recommendation[98] dated August 24, 2015,
the Office of the Bar Confidant noted that the Office of the
Court Administrator, represented by Atty. Miguel Mergal,
presented Plaza and Dela Cerna as their witnesses.
[99]
 Respondent also requested Atty. Rullyn Garcia's presence in
the proceedings.[100]
However, none of the witnesses participated in the proceedings.
Hence, the parties were required to just submit their respective
memoranda for evaluation.[101]

The Office of the Court Administrator filed a
memorandum[102] dated February 27, 2015 quoting the facts
and ruling in Judge Necessario, et al. It avers that Plaza's and
Dela Cerna's testimonies "are beside the point and these have
been rendered moot because of their failure to appear at the
hearings scheduled by the Office of the Bar Confidant."[103]
The Office of the Court Administrator argues that respondent
should be disbarred due to gross misconduct for her
participation in the solemnization of marriages.[104] It points out
that the various administrative charges against respondent
"clearly shows that she does not possess high standards of
competence and reliability required of a practicing lawyer."[105]
On the other hand, respondent's memorandum[106] dated
February 26, 2015 mainly anchored on the claim that Atty.
Rullyn Garcia's report submitted was falsified.[107] Respondent
claims that Atty. Rullyn Garcia intimidated the court employees
and caused them to "admit whatever allegations he brought up
during the investigation."[108] She prays that the case be
dismissed for lack of substantial evidence since Plaza's and
Dela Cerna's affidavits were not personally attested to by the
affiants.[109]
The Office of the Bar Confidant, after conducting the
proceedings and considering the memoranda of the parties,
recommended that the disbarment case against respondent be
dismissed for insufficiency of evidence.[110] It emphasized that
formal investigation is indispensable in disbarment
proceedings:
For the charge of gross misconduct for the irregularities in
the solemnization of marriages as the basis for this
disbarment proceedings.
This case was set for hearing. During the scheduled hearing,
the representative from OCA manifested that they are
presenting two (2) witnesses in the persons of Celerina Plaza
and Crisanto Dela Cerna. The purposes of their testimonies are
for them to substantiate the allegations against former Judge
Tormis, identify and authenticate the existence and veracity of
their respective affidavits submitted to the Court. However, the
two witnesses failed to appear during the proceedings of this
case. Thus, their affidavits are considered hearsay and
inadmissible in evidence . . . in this proceeding. The affidavit are
[sic] not entirely reliable evidence in court due to their
incompleteness and inaccuracies that may have attended in
their formulation. The affidavit does not purport to contain a
complete narration of facts and that court testimonies are
generally viewed as more reliable as they are subjected to cross
examination from the opposing party. . . . Likewise, Atty. Rullyn
Garcia, the OCA audit team head, failed to appear. The purpose
of his testimony would be to shed light more on whether the
alleged affidavits executed by Celerina Plaza and Crisanto Dela
Cema were actually and voluntarily submitted to the Court and,
if so, who required them to execute and submit the same to the
Court.
....
The determination of the merit of th[ese] disbarment
proceedings may not be relied upon solely on the premise of the
dismissal from the service of former Judge Tormis. As earlier
discussed, the grounds for dismissal from the service of former
Judge Tormis, in her capacity as presiding judge, in
administrative matter is different from this disbarment
proceedings against her. Otherwise, the Court would have ruled
on the disbarment aspect, which shall be incorporated in the
decision of dismissal from the service of former Judge Tormis in
one decision only. As provided for under the constitutional right
to due process, former Judge Tormis should be given full
opportunity to be heard and confront witnesses against her in
th[ese] disbarment proceedings. This constitutional right should
not be denied to former Judge Tormis, who cried for due
process since her dismissal from the service.
....
For the dismissal from the service, in her capacity as judge,
for gross inefficiency or neglect of duty and of gross
ignorance of the law in performance of her duties as
presiding judge.
Former Judge Tormis cried for justice in dismissing her from
service, as presiding judge, without according her due process.
She was not given the opportunity to be heard but the only
basis of her dismissal from the service was the
testimonies/allegations against her of some courts [sic]
personnel, who were allegedly intimidated by the judicial audit
team, during the judicial audit. She was not given the chance to
confront nor furnished copies of the said court personnel's
testimonies. She was denied her constitutional right against
searches and seizures of documents from her sala when the
audit team obtained documents and records, as evidence
against her, when they conducted the investigation in her sala,
since she was not informed of the said audit.
In A.M. No P-08-2519 and A.M. No. P-08-2520, the Court held
that the rights against unreasonable searches and seizures as
provided under Section 2, Article III in the Constitution may be
invoked even in administrative proceedings. The exclusionary
rule under Section 3 (2), Art. Ill of the Constitution also bars the
admission of evidence obtained in violation of such'right. The
fact that the present case is administrative in nature, does not
render the above principle inoperative. As expounded in Zulueta
vs C.A., any violation of the aforestated constitutional right
renders the evidence inadmissible for any purpose in any
proceedings.
. . . . 
Records show that all the administrative sanctions against
former Judge Tormis were all for simple gross inefficiency or
neglect of duties and gross ignorance of the law in the discharge
of her duties and responsibilities as the presiding judge of the
MTCC, Br. 4, Cebu City. Neither of these findings held her for
gross misconduct, which constitute immoral conduct, that
would tend to affect her standing and moral character as an
officer of the court and as a member of the Bar. Further, she
has never been found guilty for graft and corruption during her
entire service in the judiciary as a member of the bench in the
lower court that would cause her automatically disbarred from
the practice of law.
Finally, the counter-charges of former Judge Tormis against
Atty. Rullyn Garcia may not be given due course in th[ese]
proceedings for lack of jurisdiction.
WHEREFORE, in the light of the foregoing premises, it is
respectfully recommended that the disbarment case against
former JUDGE ROSABELLA M. TORMIS be DISMISSED for
insufficiency of evidence.[111] (Emphasis in the original, citations
omitted)
The issues for resolution are as follows:
First, whether the alleged irregularities committed by
respondent in the solemnization of marriages, where she was
found guilty of gross inefficiency or neglect of duty and of gross
ignorance of the law, constitute gross misconduct warranting
her disbarment;
Second, whether Plaza's and Dela Cerna's affidavits are
indispensable in finding that respondent's acts constitute gross
misconduct and merit the penalty of disbarment; and

Lastly, whether respondent's long line of administrative
sanctions should affect her standing as a member of the bar.
Although this Court recognizes the indispensability of the
appearance of Plaza and Dela Cerna in the proceedings before
the Office of the Bar Confidant, the disbarment case cannot be
dismissed solely based on this.
An affidavit is commonly recognized as hearsay evidence.
[112]
 Since it is often prepared not by the affiant but by another
person who makes use of his or her own language in writing the
statements, it is generally rejected unless the affiant is placed
on the witness stand to testify.[113]"Courts take judicial notice of
the fact that an affidavit does not purport to contain a complete
narration of facts."[114] Court testimonies, therefore, are favored
because these can be subjected to cross examination.[115]
Plaza and Dela Cerna failed to appear in the proceedings before
the Office of the Bar Confidant. The Office of the Bar Confidant
noted that their testimonies would have supposedly confirmed
the charge against respondent regarding the alleged
irregularities in the solemnization of marriages.[116] Plaza's and
Dela Cerna's testimonies would have likewise verified the
existence and veracity of their affidavits.[117]
Similarly, Atty. Rullyn Garcia failed to appear in the
proceedings. His purported testimony would have disproved the
accusation that Plaza's and Dela Cerna's testimonies were
executed with his intimidation.[118] Due to their absence, Plaza's
and Dela Cerna's allegations in their affidavits were rendered
inadmissible.[119]
Nevertheless, despite the inadmissibility of the affidavits, this
Court in Judge Necessario, et al. upheld the finding of the
judicial audit team that respondent committed irregularities in
the solemnization of marriages. This Court ruled that these
findings had sufficient basis and were supported by evidence,
pertinent laws, and jurisprudence.[120] Respondent was held
guilty of gross inefficiency or neglect of duty and gross
ignorance of the law warranting her dismissal, had she not been
previously dismissed from service in another case.[121]
The administrative case against respondent in Judge
Necessario, et al. should likewise be considered as a disciplinary
proceeding against her under A.M. No. 02-9-02-SC, which
provides:
Some administrative cases against Justices of the Court of
Appeals and the Sandiganbayan; judges of regular and special
courts; and court officials who are lawyers are based on
grounds which are likewise grounds for the disciplinary action of
members of the Bar for violation of the Lawyer's Oath, the Code
of Professional Responsibility, and the Canons of Professional
Ethics, or for such other forms of breaches of conduct that have
been traditionally recognized as grounds for the discipline of
lawyers.
In any of the foregoing instances, the administrative case
shall also be considered a disciplinary action against the
respondent Justice, judge or court official concerned as a member
of the Bar. The respondent may forthwith be required to
comment on the complaint and show cause why he should not
also be suspended, disbarred or otherwise disciplinary
sanctioned as a member of the Bar. Judgment in both respects
may be incorporated in one decision or resolution. (Emphasis
supplied)
While respondent blatantly violated particular Canons of
Judicial Ethics with her participation in the alleged marriage
scam, she similarly breached the following Canons on the Code
of Professional Responsibility:
CANON 1 - A lawyer shall uphold the constitution, obey the
laws of the land and promote respect for law and for legal
processes.
Rule 1.01. - A lawyer shall not engage in unlawful, dishonest,
immoral or deceitful conduct.
....
CANON 7 - A lawyer shall at all times uphold the integrity and
dignity of the legal profession. . . .
....
Rule 7.03. - A lawyer shall not engage in conduct that adversely
reflects on his fitness to practice law[.]
Membership in the bar is an essential requirement for
membership in the bench.[122] "[T]he moral fitness of a judge also
reflects his [or her] moral fitness as a lawyer."[123] Consequently,
a judge who violates the code of judicial conduct similarly
violates his or her lawyer's oath.[124]
Respondent's act of heedlessly solemnizing marriages in utter
disregard of the law and jurisprudence clearly constitutes gross
misconduct. The repetitiveness of her act shows her clear intent
to violate the law. She disregarded the lawyer's oath, which
mandates lawyers to support the Constitution and obey the
laws. In view of this, either the penalty of suspension or
disbarment is warranted. Rule 138, Section 27 provides:
Section 27. Disbarment or suspension of attorneys by Supreme
Court; grounds therefor. — A member of the bar may be
disbarred or suspended from his office as attorney by the
Supreme Court for any deceit, malpractice, or other
gross misconduct in such office, grossly immoral conduct, or by
reason of his conviction of a crime involving moral turpitude, or
for any violation of the oath which he is required to take before
admission to practice, or for a wilful disobedience of any lawful
order of a superior court, or for corruptly or wilfully appearing
as an attorney for a party to a case without authority so to do.
The practice of soliciting cases at law for the purpose of gain,
either personally or through paid agents or brokers, constitutes
malpractice. (Emphasis supplied)
Gross misconduct is an "improper or wrong conduct, the
transgression of some established and definite rule of action, a
forbidden act, a dereliction of duty, willful in character, and
implies a wrongful intent and not mere error in
judgment."[125] To consider gross misconduct "the elements of
corruption, clear intent to violate the law, or flagrant disregard
of established rule must be manifest[.]"[126]
The Supplemental Report of the Office of the Court
Administrator made the following findings:
III. On Judge Rosabella M. Tormis
1. Based on the documents, i.e., marriage certificates and other
supporting documents, actually examined, she solemnized a
total of one hundred eighty-one (181) marriages from 2003 to
2007, while the monthly reports of cases reflected a total of
three hundred and five (305) marriages she solemnized from
2004 to 2007.
2. It was only last July that her court started using a logbook to
record the marriages she solemnized, which, as of the date of
the judicial audit and investigation, reflected a total of sixty-
three (63) marriages for that month.
3. Of the 181 marriages she solemnized, one hundred thirty-one
(131), or 72.38% were solemnized under Article 34 of the Family
Code, while fifty (50), or 27.62% were with marriage licenses.
4. Of the 50 marriages with marriage license, forty (40), or 80%
marriage licenses were obtained from the local civil registrar of
Barili, Cebu, while the remaining ten (10), or 20%, were
obtained from other local civil registrars.

5. The following marriages were solemnized by her with no or
incomplete supporting documents:
....
6. The following marriages were solemnized by her even if the
validity of the supporting documents, especially the marriage
licenses presented, appear to be questionable[.]
....
7. The authenticity of the requirements for the following
marriages under Article 34 of the Family Code, by reason of the
(a) circumstances of the cohabitation, (b) minority during the
period of cohabitation, and (c) given address of the contracting
parties, appears to be questionable:
....
8. In almost all of the marriages solemnized by her, there was
no proof that the solemnization fee of P300.000, as required
under Rule 141 of the Rules of Court, was paid by the
contacting parties.[127]
The act of solemnizing marriages without the required marriage
license constitutes misconduct.[128] The positive testimonies
substantiate that respondent solemnized marriages without
previously issued licenses; hence, respondent's act deviates
from the established rule.[129] In Arañes v. Occiano:[130]
[A] marriage which preceded the issuance of the marriage
license is void, and that the subsequent issuance of such
license cannot render valid or even add an iota of validity to the
marriage. Except in cases provided by law, it is the marriage
license that gives the solemnizing officer the authority to
solemnize a marriage.[131]
Tupal v. Rojo[132] explained the role of a judge as a solemnizing
officer:
Before performing the marriage ceremony, the judge
must personally interview the contracting parties and examine
the requirements they submitted. The parties must have complied
with all the essential and formal requisites of marriage. Among
these formal requisites is a marriage license.
A marriage license is issued by the local civil registrar to parties
who have all the qualifications and none of the legal
disqualifications to contract marriage. Before performing the
marriage ceremony, the judge must personally examine the
marriage license presented.
If the contracting parties have cohabited as husband and wife
for at least five years and have no legal impediment to marry,
they are exempt from the marriage license requirement. Instead,
the parties must present an affidavit of cohabitation sworn to
before any person authorized by law to administer oaths. The
judge, as solemnizing officer, must personally examine the
affidavit of cohabitation as to the parties having lived together as
husband and wife for at least five years and the absence of any
legal impediment to marry each other. The judge must also
execute a sworn statement that he personally ascertained the
parties' qualifications to marry and found no legal impediment to
the marriage. Article 34 of the Family Code of the Philippines
provides:
Art. 34. No license shall be necessary for the marriage of a man
and a woman who have lived together as husband and wife for
at least five years and without any legal impediment to marry
each other. The contracting parties shall state the foregoing
facts in an affidavit before any person authorized by law to
administer oaths. The solemnizing officer shall also state under
oath that he ascertained the qualifications of the contracting
parties and found no legal impediment to the marriage.
[133]
 (Emphasis supplied, citations omitted)
Although it is true that marriages under Article 34 of the Family
Code merit exemption from a marriage license, respondent
should have complied with the mandate of personally
ascertaining the circumstances of cohabitation of the parties.
Records reveal that the declarations embodied in the required
joint affidavit of cohabitation of the parties do not actually
represent the accurate circumstances of their alleged
cohabitation.[134]
In addition, there were marriages solemnized by respondent
involving foreigners who only submitted affidavits in lieu of a
certificate of legal capacity to marry.[135] In cases where one or
both of the contracting parties are foreigners, Article 21[136] of
the Family Code provides that a certificate of legal capacity to
marry is necessary before the acquisition of a marriage license.
As the solemnizing officer, respondent should have ensured that
pertinent requirements were secured before the issuance of the
marriage license. Thus, the absence of a certificate of legal
capacity to marry should have prompted her to question the
propriety of the issuance.
The connivance between respondent and the court employees is
settled. The court employees acted as "'fixers' and
'facilitators'"[137] that mediated between the judges and the
contacting parties. Apparent are the superimpositions and
erasures in the addresses of the contracting parties so they
would appear to be residents of either Barili or Liloan, Cebu.
[138]
 For the contracting parties to easily obtain their marriage
license, discrepancies between their true addresses as declared
in their marriage certificates and their addresses in their
marriage licenses were made. The contracting parties were able
to get married despite incomplete requirements. Thus, the
handwritten marginal notes of monetary figures attached to the
marriage certificates show the presence of consideration.[139]
Marriage is recognized under the law as an inviolable social
institution, which is the foundation of the family.[140] In Beso v.
Daguman:[141]
[M]arriage in this country is an institution in which the
community is deeply interested. The state has surrounded it
with safeguards to maintain its purity, continuity and
permanence. The security and stability of the state are largely
dependent upon it. It is the interest and duty of each and every
member of the community to prevent the bringing about of a
condition that would shake its foundation and ultimately lead
to its destruction.[142]
Respondent used her authority as a judge to make a mockery of
marriage. As a judicial officer, she is expected to know the law
on solemnization of marriages.[143] "A judge is not only bound by
oath to apply the law; he [or she] must also be conscientious
and thorough in doing so. Certainly, judges, by the very delicate
nature of their office[,] should be more circumspect in the
performance of their duties."[144]
Similarly, as a lawyer who is an officer of the court, respondent
should have not permitted herself to be an instrument of any
violation of law. Her careless attention in dispensing with the
necessary requirements of marriage and in conniving with court
employees to further monetary interests underscores her utter
disregard of the sanctity of marriage.
Any gross misconduct of a lawyer, whether in his or her
professional dealings or in a private capacity, is basis for
suspension or disbarment.[145] Possession of good character is a
fundamental requirement not only for admission to the bar but
also for the continuance of exercising the privilege to practice
law.[146] However, as a rule, disbarment is only warranted in
cases of misconduct that "seriously affect the standing and
character of the lawyer as an officer of the court."[147]
Respondent's undue haste in repeatedly solemnizing marriages
despite incomplete and irregular requirements shows
indifference to her role as an officer of the court. The
repetitiveness of her acts shows her proclivity in transgressing
the law and protecting these violations with her authority. A
lawyer, as an officer and an essential partner of the court in the
solemn task of giving justice, is given the grave obligation of
maintaining the integrity of the courts.[148] This is especially so
with judges. A judge is "the visible representation of law and
justice from whom the people draw their will and awareness to
obey the law. For the judge to return that regard, the latter
must be the first to abide by the law and weave an example for
the others to follow."[149] In Samson v. Caballero:[150]
The first step towards the successful implementation of the
Court's relentless drive to purge the judiciary of morally unfit
members, officials and personnel necessitates the imposition of
a rigid set of rules of conduct on judges. The Court is
extraordinarily strict with judges because, being the visible
representation of the law, they should set a good example to the
bench, bar and students of the law. The standard of integrity
imposed on them is — and should be — higher than that of the
average person for it is their integrity that gives them the right
to judge.[151]
Respondent was involved in infractions that warranted her prior
administrative sanctions. Her long line of cases shows her
depravity of character, in that she remained undeterred by the
past penalties she had incurred. Considering that she was
repeatedly involved in administrative charges, the severe
penalty of disbarment should be meted against her.
Disbarment does not equate to a sanction stripping a lawyer of
his or her source of living.[152] It is intended to "protect the
administration of justice that those who exercise this function
should be competent, honorable and reliable in order that the
courts and clients may rightly repose confidence in them."[153] As
held in Foronda v. Guerrero:[154]
[T]he practice of law is a privilege burdened with conditions.
Adherence to the rigid standards of mental fitness, maintenance
of the highest degree of morality and faithful compliance with
the rules of legal profession are the conditions required for
remaining a member of good standing of the bar and for
enjoying the privilege to practice law.[155]
Respondent's conduct has fallen short of the strict standards
required by the legal profession. Hence, her repeated failure to
live up to the values expected of her as an officer of the court
renders her unfit to be a member of the bar.
WHEREFORE, respondent former Judge Rosabella M. Tormis
is DISBARRED from the practice of law and her name stricken
from the Roll of Attorneys.
Let copies of this Resolution be furnished to the Office of the
Bar Confidant to be attached to respondent's personal records,
to the Integrated Bar of the Philippines for dissemination to its
chapters and members and all administrative and quasi-judicial
agencies, and to the Office of the Court Administrator for
circulation to all courts in the Philippines.
SO ORDERED.
Sereno, C. J., Carpio, Velasco, Jr., Leonardo-De Castro, Peralta,
Bersamin, Del Castillo, Perez, Mendoza, Reyes, Perlas-Bernabe,
Leonen, Jardeleza, and Caguioa, JJ., concur.
Brion, J., on leave.
NOTICE OF JUDGMENT
Sirs/Mesdames:
Please take notice that on August 30,2016 a
Decision/Resolution, copy attached herewith, was rendered by
the Supreme Court in the above-entitled case, the original of
which was received by this Office on October 13, 2016 at 2:00 [12]
 Id.
p.m. [13]
 Id.
Very truly [14]
 Id.
yours,
[15]
 Id. at 335.
(SGD)
FELIPA G. [16]
 Id. at 336.
BORLONGAN-
ANAMA [17]
 Id.
  Clerk of Court
[18]
 Id.
[1]
 707 Phil. 328 (2013) [Per Curiam, En Banc]. [19]
 Id.
[2]
 Id. at 362. [20]
 Id.
[3]
 Id. at 334. [21]
 Id. at 337.
[4]
 Id. [22]
 Id.
[5]
 Id. [23]
 Id. at 337-338.
[6]
 Id. [24]
 Id. at 338.
[7]
 Id. [25]
 Id.
[8]
 Id. [26]
 Id.
[9]
 Rollo, p. 491, Office of the Court Administrator's Report. [27]
 Id. at 338-339.
[10]
 Id. at 494-497. [28]
 Id.
 Office of the Court Administrator v. Judge Necessario, et al.,
[11]
[29]
 FAMILY CODE, art. 34 provides:
707 Phil. 328, 334 (2013) [Per Curiam, En Banc].
Art. 34. No license shall be necessary for the marriage of a man [43]
 Id.
and a woman who have lived together as husband and wife for
at least five years and without any legal impediment to marry [44]
 Id.
each other. The contracting parties shall state the foregoing
facts in an affidavit before any person authorized by law to [45]
 Id.
administer oaths. The solemnizing officer shall also state under
oath that he ascertained the qualifications of the contracting [46]
 Id. at 344.
parties and found no legal impediment to the marriage.
[47]
 Id. at 349-350.
 Office of the Court Administrator v. Judge Necessario, et al.,
[30]

707 Phil. 328, 339 (2013) [Per Curiam, En Banc]. [48]

 Id. at 362-364.
[31]
 Id.  Rollo, p. 126, Office of the Court Administrator's
[49]

Memorandum.
[32]
 Id.
[50]
 Id.
[33]
 Id.
[51]
 Id. at 127.
[34]
 Id. at 342.
[52]
 Id. at 34, Celerina Plaza's Affidavit.
[35]
 Id.
[53]
 Id.
[36]
 Id.
[54]
 Id.
[37]
 Id.
[55]
 Id. at 37.
[38]
 Id.
[56]
 Id. at 38, Crisanto dela Cerna's Affidavit.
[39]
 Id.
[57]
 Id. at 41, Office of the Bar Confidant's Memorandum.
[40]
 Id.
[58]
 Id. at 42.
[41]
 Id.
[59]
 Id. at 52-53.
[42]
 Id.
[60]
 Id. at 49.
[61]
 Id. at 57-58. SEC. 17. Bail, Where Filed. — (a) Bail in the amount fixed may
be filed with the court where the case is pending, or in the
 Re: Automatic Conversion of Some Administrative Cases
[62]
absence or unavailability of the judge thereof, with any regional
Against Justices of the Court of Appeals and the trial judge, metropolitan trial judge, municipal trial judge, or
Sandiganbayan; Judges of Regular and Special Courts; and municipal circuit trial judge in the province, city, or
Court Officials Who are Lawyers as Disciplinary Proceedings municipality. If the accused is arrested in a province, city, or
Against Them Both as Such Officials and as Members of the municipality other than where the case is pending, bail may
Philippine Bar (2002). also be filed with any regional trial court of said place, or if no
judge thereof is available, with any metropolitan trial judge,
[63]
 Rollo, p. 57. municipal trial judge, or municipal circuit trial judge therein.
[64]
 Id. (b) Where the grant of bail is a matter of discretion, or the
accused seeks to be released on recognizance, the application
 Office of the Court Administrator v. Judge Necessario, et al.,
[65]
may only be filed in the court where the case is pending,
707 Phil. 328 (2013) [Per Curiam, En Banc]. whether on preliminary investigation, trial, or appeal.

 Office of the Court Administrator v. Hon. Tormis, et al., 706

[66]
(c) Any person in custody who is not yet charged in court may
Phil. 113 (2013) [Per Curiam, En Banc]. apply for bail with any court in the province, city, or
municipality where he is held.
 Office of the Court Administrator v. Judge Necessario, et al.,
[67]

707 Phil. 328, 363 (2013) [Per Curiam, En Banc].  Re: Report on the Judicial Audit Conducted in the RTC, Branch
[73]

60, Barili, Cebu, 488 Phil. 250, 277 (2004) [Per Curiam, En
 Visbal v. Judge Tormis, 564 Phil. 8 (2007) [Per J. Carpio
[68]
Banc].
Morales, Second Division].
 Lachica v. Tormis, 507 Phil. 211 (2005) [Per J. Ynares-
[74]

[69]
 Id. at 18. Santiago, First Division].

 Re: Report on the Judicial Audit Conducted in the RTC, Branch

[70]
 Rollo, p. 470, Resolution of Supreme Court Special First
[75]

60, Barili, Cebu, 488 Phil. 250 (2004) [Per Curiam, En Banc]. Division.

 Re: Violation of Judge Ildefonso Suerte, RTC, Branch 60,

[71]
 Office of the Court Administrator v. Hon. Tormis, et al., 706
[76]

Barili, Cebu of Administrative Order No. 36-2004 Dated March 3, Phil. 113 (2013) [Per Curiam, En Banc].
2004, 488 Phil. 250 (2004) [Per Curiam, En Banc].
[77]
 Id. at 137.
[72]
 RULES OF COURT, Rule 114, sec. 17 provides:
  Judge Navarro v. Judge Tormis, 471 Phil. 876 (2004) [Per J.
[78]

Austria-Martinez, Second Division] [96]

 Id. at 73-74.
[79]
 Id. at 887. [97]
 Id. at 82.
[80]
 Id. at 888. [98]
 Id. at 618-625.
[81]
 Rollo, p. 61. [99]
 Id. at 618.
[82]
 Id. [100]
 Id.
[83]
 Id. at 62-80. [101]
 Id.
[84]
 Id. at 61. [102]
 Id. at 111-129.
[85]
 Id. at 163. [103]
 Id. at 127.
[86]
 Id. [104]
 Id.
[87]
 Id. [105]
 Id. at 128.
[88]
 Id. at 164. [106]
 Id. at 130-137.
[89]
 Id. at 65. [107]
 Id. at 136.
[90]
 Id. [108]
 Id. at 135.
[91]
 Id. at 67. [109]
 Id. at 136.
[92]
 Id. at 187. [110]
 Id. at 625.
[93]
 Id. [111]
 Id. at 624-625.
[94]
 Id. at 78.  Flores, et al. v. Lofranco, 576 Phil. 25, 31 (2008) [Per J.
[112]

Carpio Morales, Second Division], citing People's Bank and Trust

[95]
 Id. at 73. Co. v. Judge Leonidas, 283 Phil. 991, 994 (1992) [Per J. Nocon,
Second Division].
[127]
 Rollo, pp. 518-544.
[113]
 Id.
 Moreno v. Bernabe, 316 Phil. 161, 166-167 (1995) [Per J.
[128]

 People v. Villena, 439 Phil. 509, 526 (2002) [Per Curiam, En

[114]
Kapunan, First Division].
Banc].
 Office of the Court Administrator v. Judge Necessario, et al.,
[129]

[115]
 Id. 707 Phil. 328, 352-353 (2013) [Per Curiam, En Banc].
[116]
 Rollo, p.624. [130]
 430 Phil. 197 (2002) [Per J. Puno, First Division].
[117]
 Id. [131]
 Id. at 203, citing People v. Lara, C.A. O.G. 4079.
[118]
 Id.  A.M. No. MTJ-14-1842, February 24, 2014, 717 SCRA 236
[132]

[Per J. Leonen, Third Division].

[119]
 Id.
[133]
 Id. at 245-246.
 Office of the Court Administrator v. Judge Necessario, et
[120]

al.,707 Phil. 328, 357 (2013) [Per Curiam, En Banc]. [134]

 Rollo, p. 614.
[121]
 Id. [135]
 707 Phil. 328, 352 (2013) [Per Curiam, En Banc].

 Samson v. Caballero, 612 Phil. 737, 748 (2009) [Per Curiam,

[122] [136]
 FAMILY CODE, art. 21 provides:
En Banc]
Art. 21. When either or both of the contracting parties are
[123]
 Id. citizens of a foreign country, it shall be necessary for them
before a marriage license can be obtained, to submit a certificate
[124]
 Id. of legal capacity to contract marriage, issued by their respective
diplomatic or consular officials.
 Spouses Whitson v. Atty. Atienza, 457 Phil. 11, 18 (2003)
[125]

[Per J. Puno, Third Division], citing Osop v. Fontanilla, A.C. No.
5043, September 19, 2001, 365 SCRA 398 (2001) [Per J. Buena,
Second Division].
 Lagado v. Leonido, A.M. No. P-14-3222, August 12, 2014,
[126]
Stateless persons or refugees from other countries shall, in lieu
of the certificate of legal capacity herein required, submit an
affidavit stating the circumstances showing such capacity to
contract marriage. (Emphasis supplied)

732 SCRA 579, 584 [Per J. Perlas- Bernabe, En Banc]. [137]

 Rollo, p. 493.
[138]
 Id.  Moreno v. Bernabe, 316 Phil. 161, 166 (1995) [Per J.
[149]

Kapunan, First Division].

[139]
 Id. at 496.
[150]
 612 Phil. 737 (2009) [Per Curiam, En Banc].
[140]
 FAMILY CODE, art. I provides:
[151]
 Id. at 752.
Art. 1. Marriage is a special contract of permanent union
between a man and a woman entered into in accordance with  Avancena v. Liwanag, 454 Phil. 20, 27 (2003) [Per Curiam,
[152]

law for the establishment of conjugal and family life. It is the En Banc], citing Noriega v. Sison, 210 Phil. 236, 240 (1983) [Per
foundation of the family and an inviolable social institution J. Guerrero, Second Division].
whose nature, consequences, and incidents are governed by law
and not subject to stipulation, except that marriage settlements [153]
 Id.
may fix the property relations during the marriage within the
limits provided by this Code. [154]
 516 Phil. 1 (2006) [Per J. Callejo, Sr., En Banc].
[141]
 380 Phil. 544 (2000) [Per J. Ynares-Santiago, First Division]. [155]
 Id. at 3.
[142]
 Id. at 551.

 Seguisabal v. Cabrera, 193 Phil. 809, 813 (1981) [Per J.

[143]

Melencio-Herrera, First Division].

 Beso v. Daguman, 380 Phil. 544, 552 (2000) [Per J. Ynares-

[144]

Santiago, First Division].

 Spouses Donato v. Asuncion, Sr., 468 Phil. 329, 337 (2004)

[145] Source: Supreme Court E-Library | Date created: July 06,
[Per J. Sandoval-Gutierrez, Third Division]. 2018 
This page was dynamically generated by the E-Library Content
[146]
 Id. Management System

 Spouses Saburnido v. Madroño, 418 Phil. 241, 247-248

[147]

(2001) [Per J. Quisumbing, Second Division]. Supreme Court E-Library

 Bantolo v. Castillon Jr., 514 Phil. 628, 633 (2005) [Per J.

[148]

Tinga, Second Division].

 PHILIPPINE NATIONAL OIL COMPANY-
ENERGY DEVELOPMENT
CORPORATION AND/OR PAULAQUINO AND
ESTER R. GUERZON, PETITIONERS, VS.
AMELYN A. BUENVIAJE, RESPONDENT.

[G.R. Nos. 183253 & 183257]

AMELYN A. BUENVIAJE, PETITIONER, VS.

PHILIPPINE NATIONAL OIL COMPANY-
ENERGY DEVELOPMENT CORPORATION,
PAUL A. AQUINO AND ESTER R. GUERZON,
RESPONDENTS.

DECISION

JARDELEZA, J.: 

Before us are consolidated petitions for review

on certiorari[1] of the Decision[2] dated October 31, 2007 and
Resolution[3] dated June 3, 2008 of the Court of Appeals
788 Phil. 508
(CA) in CA-G.R. S.P. Nos. 94359 and 94458. The CA
partially modified the Resolutions[4] of the National Labor
THIRD DIVISION Relations Commission (NLRC) dated September 27, 2005
and January 31, 2006, which in turn partially modified the
[ G.R. Nos. 183200-01, June 29, 2016 ] Decision[5] of the Labor Arbiter dated December 10, 2004.
 The Facts
Philippine National Oil Company-Energy Development
Corporation (PNOC-EDC) hired Amelyn Buenviaje
(Buenviaje) as Assistant to the then Chairman/President and
Chief Executive Officer Sergio A.F. Apostol (Apostol), her
father. Buenviaje's employment contract provided that she
will serve until June 30, 2004 or co-terminous with the
tenure of Apostol, whichever comes first.[6]
On August 4, 2003, Apostol approved the creation of
PNOC-EDC's new Marketing Division composed of thirty
(30) positions. Seven (7) of these thirty (30) positions were
also newly created,[7] one of which was that of a Marketing
Division Manager.[8] Buenviaje assumed this position as
early as the time of the creation of the Marketing Division.[9]
On January 5, 2004, Apostol filed his Certificate of
Candidacy as Governor for the province of Leyte, yet
continued to discharge his functions as President in PNOC-
EDC.[10] Buenviaje also continued to perform her duties as
Assistant to the Chairman/President and Marketing Division
Manager in PNOC-EDC.[11]
On February 2, 2004, Paul Aquino (Aquino), the new
President of PNOC-EDC, appointed Buenviaje to the
position of Senior Manager for Marketing Division
effective February 1, 2004.[12] The appointment letter partly
provides:
By copy of this letter, HRMD [Human Resources
Management Division] is instructed to amend your present
employment status from your present position as Assistant
to the President (co-terminus) to regular status and as such
you will be entitled to all the rights and privileges granted to
your new position under the company's benefit policies
subject to existing rules and regulations. This appointment
is subject to confirmation by your immediate superior based
on your performance during the next six months. x x x For
record purposes, please take note that your regular status is
retroactive to July 1, 2001. This date will be used for the
computation of your service credits, retirement and other
company benefits allowed under company policy.[13]
Pursuant to the instructions in the appointment letter,
Buenviaje affixed her signature to the letter, signifying that
she has read and understood its contents.[14]
In line with PNOC-EDCs policies, Buenviaje was subjected
to a performance appraisal during the first week of May
2004.[15] She received a satisfactory grade of three (3).[16] In
her subsequent performance appraisal covering the period
of May 1, 2004 to June 30, 2004, she received an
unsatisfactory grade of four (4).[17] Thus, Ester Guerzon
(Guerzon), Vice President for Corporate Affairs of PNOC-
EDC, informed Buenviaje that she did not qualify for
regular employment.[18] PNOC-EDC, through Guerzon,
communicated in writing to Buenviaje her non-confirmation
of appointment as well as her separation from the company
effective July 31, 2004.[19] On July 2, 2004, Buenviaje gave
her written comments on the results of her second
performance appraisal.[20] In reply, PNOC-EDC sent her two
(2) more letters reiterating her non-confirmation and
separation from the company.[21] Aquino also issued a
Memorandum to Buenviaje instructing her to prepare a
turnover report before her physical move-out.[22]
Buenviaje responded by filing a complaint before the Labor
Arbiter for illegal dismissal, unpaid 13th month pay, illegal
deduction with claim for moral as well as exemplary
damages, including attorney's fees and backwages.[23]
The Ruling of the Labor Arbiter
The Labor Arbiter rendered a decision in favor of
Buenviaje, the dispositive portion of which states:
WHEREFORE, premises considered, judgment is hereby
rendered declaring complainant a regular employee. As a
consequence thereof, her dismissal without any basis is
hereby deemed illegal. Respondents PNOC-Energy
Development Corporation, and/or Paul Aquino and Ester R.
Guerzon are hereby ordered to reinstate complainant to her
former position without loss of seniority rights and other
benefits and with full backwages reckoned from August 1,
2004 up to her actual or payroll reinstatement, which as of
this date is in the amount of P718,260.40.
Further, for having acted with manifest bad faith and given
the extent of the damage done to complainant who occupies
a high managerial position, respondents are jointly and
severally ordered to pay complainant moral damages in the
amount of P1,000,000.00 and exemplary damages in the
amount of P500,000.00.
Finally, respondents are hereby ordered to return to
complainant the amount of P51,692.72, which they illegally
deducted from her last salary and to pay the sum equivalent
to ten percent of the judgment award as and by way of
attorney's fees.
SO ORDERED.[24] (Emphasis in the original.)
The Labor Arbiter held that Buenviaje was a regular
employee because her appointment letter clearly says so.
Any doubt caused by the statement in the appointment letter
that Buenviaje's appointment was subject to confirmation
must be resolved against PNOC-EDC. In addition, PNOC-
EDC failed to prove that reasonable standards were
explained to Buenviaje at the time of her engagement,
thusly negating PNOC-EDC's claim that she was merely a
probationary employee. The Labor Arbiter noted that
PNOC-EDC even admitted that the alleged standards were
only set and discussed with Buenviaje more than a month
after her actual appointment.[25]
The Labor Arbiter further ruled that PNOC-EDC also failed
to explain why Buenviaje was allowed to enjoy benefits that
were supposed to be exclusive for regular employees. As a
regular employee, therefore, Buenviaje could only be
dismissed for any of the just or authorized causes under
Articles 282 and 283[26] of the Labor Code. Since the cause
for Buenviaje's dismissal was not included in any of the
grounds enumerated in either Article, she was considered
illegally dismissed. The Labor Arbiter found Guerzon and
Aquino to have acted in bad faith due to their failure to
explain the standards to Buenviaje, as well as why the
evaluation form for regular employees was used in her
evaluation. They also failed to respond to Buenviaje's
allegation that the second evaluation was done in bad faith
to serve as an excuse in dismissing her. The Labor Arbiter
noted that the second evaluation appeared irregular because
it did not bear the signature and approval of Aquino.
Consequently, for lack of the required approval, the second
evaluation could not serve as a valid basis to remove
Buenviaje.[27]
Both parties appealed to the NLRC.
The Ruling of the National Labor Relations Commission
In its Resolution[28] dated September 27, 2005, the NLRC
ruled:
WHEREFORE, premises considered, the appeal is
partly GRANTED and the Decision dated 10 December
2004 is hereby MODIFIED ordering respondent-appellant
PNOC-Energy Development Corporation to pay
complainant-appellee financial assistance in the amount of
P229,681.35 only and her accrued wages in the amount of
P1,224,967.28 for the period covering December 2004, the
date of the decision ordering her reinstatement until the date
of this Resolution. The order to return to complainant-
appellee the amount of P51,692.72, which represents
deduction from her salary and not raised on
appeal, STANDS. Finally, the award of moral and
exemplary damages and attorney's fees, as well as the joint
and solidarily (sic) liability of individual respondents Paul
A. Aquino and Ester R. Guerzon are hereby DELETED.
SO ORDERED.[29] (Emphasis in the original.)
The NLRC agreed with the Labor Arbiter that Buenviaje
was a regular employee of PNOC-EDC, noting that the
terms of her appointment expressly grants a regular status of
employment.[30] The NLRC also found that PNOC-EDC
admitted that Buenviaje has been performing the functions
of a Marketing Division Manager for more than six (6)
months before she was formally appointed to the said
position.[31]Nevertheless, the NLRC ruled that she was not
illegally dismissed because she did not enjoy security of
tenure.[32] The NLRC noted that the condition in Buenviaje's
appointment letter, which provided that her appointment is
subject to confirmation by her immediate superior based on
her performance during the next six (6) months, was clear
and understood by her when she affixed her signature to the
appointment letter.[33]The NLRC concluded that only upon
confirmation of her appointment will Buenviaje enjoy the
right to security of tenure.[34] As it was, PNOC-EDC found
her performance unsatisfactory and Buenviaje failed to
disprove these findings. Therefore, Buenviaje failed to
complete her appointment as a regular employee and her
non-confirmation cannot be considered as an illegal
dismissal.[35]
With respect to Buenviaje's prayer for moral and exemplary
damages, and attorney's fees, the NLRC found no basis to
grant the same. The NLRC also found no basis for the
solidary liability of Aquino and Guerzon.[36]
Both parties asked the NLRC to reconsider its Resolution,
but the NLRC denied their motions. Thus, both parties filed
their petitions for certiorari with the CA.
The Ruling of the Court of Appeals
The CA partially modified the Resolution of the NLRC. The
dispositive portion of the CA Decision[37] dated October 31,
2007 reads:
WHEREFORE, in view of all the foregoing, the
September 27, 2005 and January 31, 2006 Resolutions of
the NLRC are MODIFIED as follows:
For having been illegally dismissed, petitioner Amelyn
Buenviaje is entitled to receive a separation pay equivalent
to 1/2 month pay for every year of service (with a fraction
of at least 6 months considered one whole year) in lieu of
reinstatement. In addition she is also to receive full
backwages inclusive of allowances and other benefits or
their monetary equivalent, computed from the time the
compensation was withheld up to the finality of this
decision.
The other awards in the NLRC decision as well as the
deletion of the joint and solidary liabilities of Paul A.
Aquino and Ester R. Guerzon are hereby AFFIRMED.
SO ORDERED.[38] (Emphasis in the original.)
The CA found no reason to disturb the findings of both the
Labor Arbiter and the NLRC that Buenviaje was a regular
employee of PNOC-EDC. However, it disagreed with the
NLRC's ruling that Buenviaje failed to acquire security of
tenure. The CA stated that where an employee has been
engaged to perform activities which are usually necessary or
desirable in the usual business of the employer, such
employee is deemed a regular employee and is entitled to
security of tenure notwithstanding the contrary provisions
of his contract of employment.[39] As a regular employee,
Buenviaje may only be dismissed if there are just or
authorized causes. Thus, PNOC-EDC's reasoning that she
failed to qualify for the position cannot be countenanced as
a valid basis for her dismissal.[40]

Both parties filed their respective motions for
reconsideration, which the CA denied. Hence, these
consolidated petitions, which present the following issues:
I. Whether Buenviaje was a permanent employee;
II. Whether Buenviaje was illegally dismissed;
III. Whether Buenviaje is entitled to moral and
exemplary damages as well as attorney's fees;
IV. Whether Buenviaje should be given separation pay in
lieu of reinstatement; and
V. Whether Aquino and Guerzon should be held jointly
and severally liable to Buenviaje.
Our Ruling
Buenviaje was a permanent employee
Buenviaje was hired as a Marketing Division Manager, a
position that performs activities that are usually necessary
and desirable to the business of PNOC-EDC and is thusly,
regular. As an employer, PNOC-EDC has an exclusive
management prerogative to hire someone for the position,
either on a permanent status right from the start or place
him first on probation. In either case, the employee's right to
security of tenure immediately attaches at the time of hiring.
[41]
 As a permanent employee, he may only be validly
dismissed for a just[42] or authorized[43]cause. As a
probationary employee, he may also be validly dismissed
for a just or authorized cause, or when he fails to qualify as
a regular employee in accordance with reasonable standards
made known to him by the employer at the time of his
engagement.[44] Apart from the protection this last ground in
the dismissal of a probationary employee affords the
employee, it is also in line with the right or privilege of the
employer to choose who will be accorded with regular or
permanent status and who will be denied employment after
the period of probation. It is within the exercise of this right
that the employers may set or fix a probationary period
within which it may test and observe the employee's
conduct before hiring him permanently.[45]
Here, PNOC-EDC exercised its prerogative to hire
Buenviaje as a permanent employee right from the start or
on February 1, 2004, the effectivity date of her appointment.
In her appointment letter, PNOC-EDC's President expressly
instructed the HRMD to amend Buenviaje's status from co-
terminous to regular. He also informed her that her regular
status shall be retroactive to July 1, 2001. Nowhere in the
appointment letter did PNOC-EDC say that Buenviaje was
being hired on probationary status. Upon evaluation on two
(2) occasions, PNOC-EDC used a performance appraisal
form intended for permanent managerial employees, even if
the company had a form for probationary employees. The
intention, therefore, all along was to grant Buenviaje regular
or permanent employment. As correctly observed by the
CA:
Accordingly, at the time of her formal appointment to the
position on February 2, 2004, Amelyn Buenviaje has been
performing the functions of a Senior Manager of the
Marketing Division for almost six months. After having had
the opportunity to observe her performance for almost six
months as Senior Marketing Manager, PNOC should not
have formally appointed her if she appeared to have been
unqualified for the position. But as it is, Amelyn Buenviaje
was formally appointed and given a regular status. x x x[46]
This intention was clear notwithstanding the clause in the
appointment letter saying that Buenviaje's appointment was
subject to confirmation by her immediate superior based on
her performance during the next six (6) months. This clause
did not make her regularization conditional, but rather,
effectively informed Buenviaje that her work performance
will be evaluated later on. PNOC-EDC, on the other hand,
insists that this clause demonstrates that Buenviaje was
merely a probationary employee. Consequently, when she
failed to meet the standards set by PNOC-EDC, the latter
was well within its rights not to confirm her appointment
and to dismiss her.
We are not persuaded.
Firstly, if the clause in the appointment letter did cause an
ambiguity in the employment status of Buenviaje, we hold
that the ambiguity should be resolved in her favor. This is in
line with the policy under our Labor Code to afford
protection to labor and to construe doubts in favor of labor.
[47]
 We upheld this policy in De Castro v. Liberty
Broadcasting Network, Inc.,[48] ruling that between a laborer
and his employer, doubts reasonably arising from the
evidence or interpretation of agreements and writing should
be resolved in the former's favor.[49] Hence, what would be
more favorable to Buenviaje would be to accord her a
permanent status.
But more importantly, apart from the express intention in
her appointment letter, there is substantial evidence to prove
that Buenviaje was a permanent employee and not a
probationary one.
A probationary employee is defined as one who is on trial
by an employer during which the employer determines
whether or not he is qualified for permanent employment.
[50]
 In general, probationary employment cannot exceed six
(6) months, otherwise the employee concerned shall be
considered a regular employee.[51] It is also indispensable in
probationary employment that the employer informs the
employee of the reasonable standards that will be used as a
basis for his or her regularization at the time of his or her
engagement.[52] If the employer fails to comply with this,
then the employee is considered a regular employee.[53]
In their reply to Buenviaje dated July 28, 2004, PNOC-EDC
reminded Buenviaje that the standards "were thoroughly
discussed with [her] separately soon alter [she] signed [her]
contract, as well as that which was contained in the job
description attached thereto."[54] PNOC-EDC maintained
this position in its appeal memorandum,[55] asserting that
Buenviaje was apprised of the reasonable standards for
regularization by virtue of the job description attached to
her appointment.[56] They also alleged that the standards
were discussed with Buenviaje prior to her first and second
appraisals.[57] We, however, do not find these circumstances
sufficient to categorize Buenviaje as a probationary
employee.
In Abbott Laboratories, Philippines v. Alcaraz,[58] we were
confronted with the similar question of whether Alcaraz was
sufficiently informed of the reasonable standards that would
qualify her as a regular employee. In affirming that she was,
we enumerated the details and circumstances prior to,
during the time of her engagement, and the incipient stages
of her employment that show she was well-apprised of her
employer's expectations that would, in turn, determine her
regularization. These were:
(a) On June 27, 2004, Abbott caused the publication in a
major broadsheet newspaper of its need for a Regulatory
Affairs Manager, indicating therein the job description for
as well as the duties and responsibilities attendant to the
aforesaid position; this prompted Alcaraz to submit her
application to Abbott on October 4, 2004;
(b) In Abbott's December 7, 2004 offer sheet, it was stated
that Alcaraz was to be employed on a probationary status;
(c) On February 12, 2005, Alcaraz signed an employment
contract which specifically stated, inter alia, that she was to
be placed on probation for a period of six (6) months
beginning February 15, 2005 to August 14, 2005;
(d) On the day Alcaraz accepted Abbott's employment offer,
Bernardo sent her copies of Abbott's organizational
structure and her job description through e-mail;
(e) Alcaraz was made to undergo a pre-employment
orientation where Almazar informed her that she had to
implement Abbott's Code of Conduct and office policies on
human resources and finance and that she would be
reporting directly to Walsh;
(f) Alcaraz was also required to undergo a training program
as part of her orientation;
(g) Alcaraz received copies of Abbott's Code of Conduct
and Performance Modules from Misa who explained to her
the procedure for evaluating the performance of
probationary employees; she was further notified that
Abbott had only one evaluation system for all of its
employees; and
(h) Moreover, Alcaraz had previously worked for another
pharmaceutical company and had admitted to have an
"extensive training and background" to acquire the
necessary skills for her job.[59]
We concluded that "[c]onsidering the totality of the above-
stated circumstances, it cannot, therefore, be doubted that
Alcaraz was well-aware that her regularization would
depend on her ability and capacity to fulfill the
requirements of her position as Regulatory Affairs Manager
and that her failure to perform such would give Abbott a
valid cause to terminate her probationary employment."[60]
We stress here that the receipt by Buenviaje of her job
description does not make this case on all fours with Abbott.
The receipt of job description and the company's code of
conduct in that case was just one of the attendant
circumstances which we found equivalent to being actually
informed of the performance standards upon which a
probationary employee should be evaluated. What was
significant in that case was that both the offer sheet and the
employment contract specifically stated that respondent was
being employed on a probationary status. Thus, the
intention of Abbott was to hire Alcaraz as a probationary
employee. This circumstance is not obtaining in this case
and the opposite, as we have already discussed, is true.
Of equal significance, the job description attached to
Buenviaje's appointment letter merely answers the question:
"what duties and responsibilities does the position entail?",
but fails to provide the answer/s to the question: "how
would the employer gauge the performance of the
probationary employee?". The job description merely
contains her job identification, her immediate superior and
subordinates, a list of her job objectives, duties and
responsibilities, and the qualification guidelines required of
her position (i.e., minimum education, minimum
experience, and special skills). There is no question that
performance of duties and responsibilities is a necessary
standard for qualifying for regular employment. It does not
stop on mere performance, however. There must be a
measure as to how poor, fair, satisfactory, or excellent the
performance has been. PNOC-EDC, in fact, used an
appraisal form when it evaluated the performance of
Buenviaje twice. A copy of this appraisal form, unlike in
Abbot, was not given to Buenviaje at any time prior to,
during the time of her engagement, and the incipient stages
of her employment. A comparison of the job description and
the standards in the appraisal form reveals that they are
distinct. The job description is just that, an enumeration of
the duties and responsibilities of Buenviaje. To better
illustrate, the job objectives, duties and responsibilities of
Buenviaje are set out below:
III. JOB OBJECTIVE
 1. To set the overall marketing objectives and directions
of EDC, in coordination with EDC Operations,
through the Department Managers and Corporate
Services units.
2. To initiate the preparation of detailed/specific short
(annual) and medium to long term (2-5 years)
marketing plans and programs.
3. To monitor the implementation of the work
performance and execution of the plans and
programs of Public & Marketing Relations, Power &
Energy Services, and Market Development.
4. To manage the functional and administrative
requirements of the managers for Public &
Marketing Relations, Power & Energy Services, and
Market Development.
IV. DUTIES AND RESPONSIBILITIES
1. Ensures that a survey of potential markets and
customers in relation to newly developed or soon-to-
be- completed power projects are regularly initiated.
2. Develops marketing plans and strategies with
Managers and staff, relevant to new and/or
uncommitted power and/or resources for both
contracted and through the Wholesale Electricity
Spot Market (WESM).
3. Develops marketing plans and strategies with
managers on new opportunities for Energy Services
(Drilling, Geoscientific, Design and Engineering,
etc.).
4. Ensures and oversees the development of a business
networking system and database.
5. Establishes business contacts (domestic and
overseas) and oversees market development and
opportunities through the subordinate managers.
6. Ensures and oversees the development of an effective
advertising program, annually and as needed (print,
publication, etc.), to propagate and enhance EDC's
public image and awareness of its marketable
products and services.
7. Develops new marketable products and services, in
coordination with Operations and Corporate
Services.
8. Represents Top Management in various fora,
conventions, etc. for business/marketing
opportunities domestically and internationally.
9. Ensures that an effective system of customer after-
sales and service monitoring is in place.
10. Approves all expense disbursements, contracts, and
other corporate documents in accordance with the
approval limits specified in the EDC Approvals
Policy.
11. Issues instructions on marketing matters to the
subordinate managers in accordance with decisions
 from Top Management/Board and/or as coordinated
with Operations and Corporate Services.
12. Initiates and conducts check-up meetings and
conferences with the subordinate managers and their
staff.
13. Functions as budget administrator of the Senior
Manager's Office.
14. Oversees the preparation of the consolidated annual
capital and operating expense budget for the division.
15. Lixecutes EDC's marketing/contracts, in accordance
with approvals policy.
16. Oversees the preparation and consolidation of all the
personnel performance appraisals of the division and
effectively administers the forced-ranking program,
consistent with company guidelines.
17. Administers the personnel performance appraisal of
office staff and managers.
18. Oversees the preparation of the training requirements
of the subordinate managers and their staff.
19. Performs other duties which may be assigned from
time to time.[61]
The foregoing, however, invite the question as to what are
the specific qualitative and/or quantitative standards of
PNOC-EDC. With respect to the first job objective listed
above, for instance, one may ask: "how will PNOC-EDC
measure the performance of Buenviaje as to whether she
has adequately set the overall marketing objectives and
directions of PNOC-EDC, in coordination with PNOC-EDC
Operations, through the Department Managers and
Corporate Service units?". The same is true with the first
duty: "how will PNOC-EDC measure the performance of
Buenviaje as to whether she has ensured that a survey of
potential markets and customers in relation to newly
developed or soon-to-be-completed power projects are
regularly initiated?".
On the other hand, the appraisal form appraises the elements
of performance, which are categorized into results-based
factors, individual effectiveness and co-worker
effectiveness.[62] Pertinently, the results-based factors, which
are broken down into output indicators of: 1.) quality, 2.)
quantity, 3.) timeliness, 4.) cost effectiveness, 5.)
safety/housekeeping/environmental consciousness, and 6.)
profit objectives, are rated according to expected outputs or
key result areas, performance standards, and actual
accomplishments. Clearly, the form specifies the
performance standards PNOC-EDC will use, which
demonstrates that PNOC-EDC expected a certain manner,
level, or extent by which she should perform her job.
PNOC-EDC knew the job description and the performance
appraisal form are not one and the same, having specifically
used the latter when it evaluated Buenviaje and not the job
description attached to the appointment letter. The fact,
therefore, that PNOC-EDC used a performance appraisal
form with standards expected from Buenviaje further
negates any assumption that these standards were of basic
knowledge and common sense,[63] or that Buenviaje's
position was self-descriptive such that there was no need to
spell out the standards at the time of her engagement.[64]
Buenviaje was illegally dismissed
The foregoing discussion proves Buenviaje was hired as a
permanent employee on February 1, 2004. As a permanent
employee, she may only be dismissed by PNOC-EDC after
observing the following substantive and procedural
requirements:
1. The dismissal must be for a just or authorized cause;
2. The employer must furnish the employee with two
(2) written notices before termination of employment
can be legally effected. The first notice states the
particular acts or omissions for which dismissal is
sought while the second notice states the employer's
decision to dismiss the employee; and
3. The employee must be given an opportunity to be
heard.[65]
PNOC-EDC failed to observe these requirements because it
operated on the wrong premise that Buenviaje was a
probationary employee. But even if we were to assume that
she was, she would still be illegally dismissed in light of
PNOC-EDC's violation of the provisions of the Labor Code
in dismissing a probationary employee.
A probationary employee also enjoys security of tenure,
although it is not on the same plane as that of a permanent
employee.[66] This is so because aside from just and
authorized causes, a probationary employee may also be
dismissed due to failure to qualify in accordance with the
standards of the employer made known to him at the time of
his engagement.[67] PNOC-EDC dismissed Buenviaje on this
latter ground; that is, Buenviaje allegedly failed to meet the
standards set by the company. In dismissing probationary
employees on this ground, there is no need for a notice and
hearing.[68] The employer, however, must still observe due
process of law in the form of: 1) informing the employee of
the reasonable standards expected of him during his
probationary period at the time of his engagement;[69] and 2)
serving the employee with a written notice within a
reasonable time from the effective date of termination.[70] By
the very nature of a probationary employment, the
employee needs to know from the very start that he will be
under close observation and his performance of his assigned
duties and functions would be under continuous scrutiny by
his superiors. It is in apprising him of the standards against
which his performance shall be continuously assessed
where due process lies.[71] Likewise, probationary
employees are entitled to know the reason for their failure to
qualify as regular employees.[72]
As we have previously settled, PNOC-EDC failed to inform allotted reasonable period, or by producing unsatisfactory
Buenviaje of the reasonable standards for her regularization results. This management prerogative of requiring standards
at the time of her engagement. The unfairness of this failure may be availed of so long as they are exercised in good faith
became apparent with the results of Buenviaje's appraisals. for the advancement of the employer's interest.[75]
In her first appraisal covering a three-month period from
February 1, 2004 to April 30, 2004, Buenviaje received a The fact that an employee's performance is found to be poor
satisfactory rating. It was in her second appraisal covering a or unsatisfactory does not necessarily mean that the
two-month period from May 1, 2004 to June 30, 2004 employee is grossly and habitually negligent of or
where she received an unsatisfactory rating that led to her inefficient in his duties.[76] Buenviaje's performance, poor as it
dismissal. There was no proof, however, that per PNOC- might have been, did not amount to gross and habitual neglect of
EDC's standards, receiving an unsatisfactory rating of four duties or gross inefficiency. The markedly different results of
(4) from a satisfactory rating of three (3) will result to several factors in the appraisals in a span of five (5) months
failure to qualify for regularization. prove this. To illustrate:
February 1, 2004 - April 30,
May 1, 2004 - June 30, 2004
Neither would PNOC-EDC's reason for dismissing 2004
Buenviaje qualify as a just cause. Under Article 297 of the Quantity — x x x Completed Quantity — While several
Labor Code, an unsatisfactory rating can be a just cause for the public relations programs marketing programs have been
dismissal only if it amounts to gross and habitual neglect of scheduled within the period undertaken, no submissions
duties.[73] Analogous to this ground, an unsatisfactory including those directed on were made on the projects
special assignment basis like the required by immediate superior
performance may also mean gross inefficiency. "Gross
Dr. Alcaraz lounge. x x x.
inefficiency" is closely related to "gross neglect," for both
involve specific acts of omission on the part of the Timeliness — Timely Timeliness — Mas not met
submission of reports and organizational needs as the
employee resulting in damage to the employer or to his
processed invoices. PR required projects on Tongonan I
business.[74] Failure to observe prescribed standards of work programs were responsive to and Bacman deemed important
or to fulfill reasonable work assignments due to inefficiency company's call. for the formulation of strategies
may constitute just cause for dismissal. Such inefficiency is have not been submitted. x x x
understood to mean failure to attain work goals or work Priorities have not been set so as
quotas, either by failing to complete the same within the to be responsive to company
 needs. was shown here, does not constitute a just cause for the
Cost Effectiveness — Observed Cost Effectiveness — Some dismissal of the employee.[80]
in general the proper use of recommendations tended to be
operating and capital budgets. expensive and demonstrated PNOC-EDC would also be in violation of procedural due
non-optimization of funds, process if Buenviaje were dismissed on the purported
methods and manpower. ground of gross negligence or inefficiency. For termination
Judgment — Able to come up Judgment — Needed to come up of employees based on just causes, the employer must
with good decisions but has to with more sound furnish the employee with two (2) written notices before
arrive at more complete and decisions. Examples: x x x termination of employment can be effected: a first written
conclusive notice that informs the employee of the particular acts or
recommendations. Examples: x omissions for which his or her dismissal is sought, and a
xx second written notice which informs the employee of the
Leadership — She has a strong Leadership — x x x Not much employer's decision to dismiss him. In considering whether
personality and able to influence supervision and direction is the charge in the first notice is sufficient to warrant
others specially the subordinates given to her various departments dismissal under the second notice, the employer must afford
to accomplish their tasks as can be gleaned from the
the employee ample opportunity to be heard.[81] Although
diligently.[77] quality of work produced
particularly in Market
Buenviaje indeed received two (2) letters from PNOC-EDC
Development where results are regarding her termination, these letters fall short of the two
mere researchers (sic) without (2) notices required under the law. The first letter sent to
firm recommendations where Buenviaje failed to apprise her of the particular acts or
applicable.[78] omissions on which her dismissal was based. It was merely
Gross negligence implies a want or absence of or failure to a bare statement that Buenviaje's performance failed to meet
exercise slight care or diligence, or the entire absence of PNOC-EDC's minimum requirements. True, Buenviaje
care. It evinces a thoughtless disregard of consequences replied to the first letter, but considering that it did not
without exerting any effort to avoid them.[79] As a just cause, specify the acts or omissions warranting her dismissal but
it also has to be habitual, which implies repeated failure to only served to inform her of her termination, Buenviaje was
perform one's duties for a period of time, depending upon not afforded a reasonable and meaningful opportunity to
the circumstances. A single or isolated act of negligence, as explain her side.

Buenviaje is entitled to separation pay and attorney's fees
An employee who is unjustly dismissed from work shall be
entitled to reinstatement without loss of seniority rights and
other privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was
withheld from him up to the time of his actual
reinstatement.[82] However, there are instances when
reinstatement is no longer feasible, such as when the
employer-employee relationship has become strained. In
these cases, separation pay may be granted in lieu of
reinstatement, the payment of which favors both parties. As
we have previously stated in Bank of Lubao, Inc. v.
Manabat:[83]
x x x On one hand, such payment [of separation pay]
liberates the employee from what could be a highly
oppressive work environment. On the other hand, it releases
the employer from the grossly unpalatable obligation of
maintaining in its employ a worker it could no longer trust.
[84]
Separation pay or financial assistance may also be granted
to a legally terminated employee as an act of social justice
and equity when the circumstances so warrant.[85] In
awarding financial assistance, the interests of both the
employer and the employee must be tempered, if only to
approximate what Justice Laurel calls justice in its secular
sense.[86] As the term suggests, its objective is to enable an
employee to get by after he has been stripped of his source
of income from which he relies mainly, if not, solely.[87]
We agree with the CA that the reinstatement of Buenviaje is
no longer viable given the irreconcilable differences and
strained relations between her and PNOC-EDC. In light of
this, separation pay with full backwages, in lieu of
Buenviaje's reinstatement, is warranted.
Moreover, it is a well-settled rule that in actions for
recovery of wages, or where an employee was forced to
litigate and, thus, incur expenses to protect his rights and
interests, attorney's fees may be granted pursuant to Article
111 of the Labor Code.[88] Considering, therefore, that she
was forced to litigate in order to assert her rights,
[89]
 Buenviaje is entitled to attorney's fees in the amount
often percent (10%) of the total award of backwages.[90]
Buenviaje is entitled to moral and exemplary damages
The claim for moral damages cannot be justified solely
upon the premise that the employer fired his employee
without just cause or due process. Additional facts must be
pleaded and proven to warrant the grant of moral damages
under the Civil Code, these being, that the act of dismissal
was attended by bad faith or fraud, or was oppressive to
labor, or done in a manner contrary to morals, good
customs, or public policy; and, of course, that social
humiliation, wounded feelings, grave anxiety, etc., resulted
therefrom.[91] Bad faith "implies a conscious and intentional
design to do a wrongful act for a dishonest purpose or moral
obliquity."[92] Bad faith must be proven through clear and
convincing evidence. This is because bad faith and fraud are
serious accusations that can be so conveniently and casually
invoked, and that is why they are never presumed. They
amount to mere slogans or mudslinging unless convincingly
substantiated by whoever is alleging them.[93]
Exemplary damages, on the other hand, may be granted
when the dismissal of the employee was done in a wanton,
oppressive or malevolent manner.[94]
Buenviaje argues that she is entitled to an award of these
damages because PNOC-EDC, Aquino, and Guerzon acted
in bad faith.[95] To Buenviaje's mind, the following acts of
PNOC-EDC, Aquino, and Guerzon prove that they acted in
bad faith:
1. They used the evaluation form for regular employees
in evaluating Buenviaje;
2. Buenviaje was evaluated using the standards for
regular employees;
3. Unlike the first evaluation, Aquino did not sign the
second evaluation; and
4. The second evaluation was conducted without
Buenviaje's knowledge.[96]
We agree that there was manifest bad faith when Buenviaje
was evaluated using the standards and performance
appraisal form for regular employees, yet, in dismissing her,
she was treated as a probationary employee. To reiterate, the
clear intention of PNOC-EDC from the start was to grant
Buenviaje a permanent status. She was evaluated in a short
span of five (5) months, in which her previous satisfactory
outputs turned unsatisfactory. There were also factors or
variables that showed PNOC-EDC initially found as her
strengths but were now inexplicably viewed as negative.
For example, PNOC-EDC found Buenviaje's political
connections helpful in pushing for marketing programs; yet,
PNOC-EDC criticized her for flaunting her strong political
connections as an instrument in achieving the company's
objectives.[97]
With regard to the third and fourth acts, though, we find no
malice or bad faith against PNOC-EDC. PNOC-EDC was
able to refute the allegation that Aquino did not sign the
second evaluation by annexing a signed one in its appeal
memorandum.[98] As to the allegation that her second
evaluation was conducted without her knowledge, we find
the same inconsequential. To repeat, Buenviaje's
appointment letter apprised her of performance evaluations
in the horizon for the next six (6) months. Even if it weren't
expressly communicated to her, it would have certainly
been reasonable for Buenviaje to expect that her
performance would be gauged and appraised at any given
time.
Thus, the Labor Arbiter's award of moral and exemplary
damages is proper. We are wont, however, to reduce the
amounts he fixed by reason alone of the "extent of the
damage done to [Buenviaje] who occupies a high
managerial position."[99] We find his award excessive in the
absence of evidence to prove the degree of moral suffering
or injury that Buenviaje suffered.[100] In line with our ruling
in Magsaysay Maritime Corporation v. Chin, Jr.,[101] we
hold that an award of P30,000 as moral damages and
P25,000 as exemplary damages is more fair and reasonable.
We explained:
x x x It has been held that in order to arrive at a judicious
approximation of emotional or moral injury, competent and
substantial proof of the suffering experienced must be laid
before the court. It is worthy to stress that moral damages
are awarded as compensation for actual injury suffered and
not as a penalty. The Court believes that an award of
P30,000.00 as moral damages is commensurate to the
anxiety and inconvenience that Chin suffered.
As for exemplary damages, the award of P25,000.00 is
already sufficient to discourage petitioner Magsaysay from
entering into iniquitous agreements with its employees that
violate their right to collect the amounts to which they are
entitled under the law. Exemplary damages are imposed not
to enrich one party or impoverish another but to serve as a
deterrent against or as a negative incentive to curb socially
deleterious actions.[102] (Citations omitted.)
However, the extent of liability of the respondents should
not be solidary.
A corporation, as a juridical entity, may act only through its
directors, officers and employees. Obligations incurred as a
result of the directors' and officers' acts as corporate agents,
are not their personal liability but the direct responsibility of
the corporation they represent. As a rule, they are only
solidarity liable with the corporation for the illegal
termination of services of employees if they acted with
malice or bad faith.[103]
To hold a director or officer personally liable for corporate
obligations, two (2) requisites must concur: (1) it must be
alleged in the complaint that the director or officer assented
to patently unlawful acts of the corporation or that the
officer was guilty of gross negligence or bad faith; and (2)
there must be proof that the officer acted in bad faith.[104]
While the position paper of Buenviaje alleges that the
respondents acted in bad faith and that Aquino and
Guerzon, in particular, conspired with each other to
terminate her illegally, we find these allegations were not
clearly and convincingly proved. To our mind, there was attached hereto, was rendered by the Supreme Court in the
insufficient evidence that Aquino and Guerzon were above-entitled cases, the original of which was received by
personally motivated by ill-will in dismissing Buenviaje.[105] this Office on July 14, 2016 at 10:35 a.m.

WHEREFORE, the petition in G.R. Nos. 183200-

01 is DENIED while the petition in G.R. Nos. Very truly yours,
183253 and 183257 is PARTIALLY GRANTED. The (SGD)WILFREDO V. LAPITAN
October 31, 2007 Decision and June 3, 2008 Resolution of Division Clerk of Court
the CA in CA-G.R. S.P. Nos. 94359 and 94458
are AFFIRMEDwith the MODIFICATION that PNOC-
EDC is ordered to pay Amelyn Buenviaje moral damages in [1]
the amount of P30,000, exemplary damages in the amount  Rollo (G.R. Nos. 183200-01), pp. 3-28 and rollo (G.R.
of P25,000, and attorney's fees equivalent to ten percent Nos. 183253 & 183257), pp. 34-50-A.
(10%) of the total award of backwages. [2]
 Penned by Associate Jiistice Lucenito N. Tagle and
SO ORDERED. concurred in by Associate Justices Amelita G. Tolentino
and Agustin S. Dizon of the Fifteenth Division, rollo (G.R.
Velasco, Jr., (Chairperson), Peralta, Perez, and Reyes, JJ., Nos. 183200-01), pp. 29-51.
concur. [3]
 Id. at 52-55.
[4]
 Id. at 185-200 and 223-225; per curiam.
July 14, 2016
[5]
 Id. at 140-152; penned by Labor Arbiter Elias H. Salinas.
NOTICE OF JUDGMENT
[6]
 Id. at 30.
Sirs / Mesdames:
[7]
 Id.
Please take notice that on June 29, 2016 a Decision, copy
[8] [22]
 Rollo (G.R. Nos. 183200-01), p. 48.  Id.
[9] [23]
 Id.  Id.
[10] [24]
 Rollo (G.R. Nos. 183200-01), pp 30-31.  Rollo (G.R. Nos. 183200-01), pp. 151-152.
[11] [25]
 Id. at 49.  Id. at 145-148.
[12] [26]
 Id. at 30-33.  Renumbered to Articles 297 and 298 pursuant to
Republic Act No. 10151. (For all Labor Code citations,
[13]
 Id. at 31-32. please refer to Department of Labor and Employment
Department Advisory No. 1, Series of 2015.)
[14]
 Id. at 33.
[27]
 Rollo (G.R. Nos. 183200-01), pp. 148-150.
[15]
 Id.
[28]
 Id. at 185-200.
[16]
 Id.
[29]
 Id. at 199.
[17]
 Id.
[30]
 Id. at 195.
[18]
 Id.
[31]
 Id.
[19]
 Id.
[32]
 Id.
[20]
 Rollo (G.R. Nos. 183200-01), pp. 33-34.
[33]
 Rollo (G.R. Nos. 183200-01), p. 196.
[21]
 Id. at 34.
[34]
 Id.
 e) Other causes analogous to the foregoing. (As renumbered by
[35]
 See rollo (G.R. Nos. 183200-01), pp. 196-197. Republic Act No. 10151.)
[43]
 LABOR CODE, Art. 298. Closure of Establishment and
[36]
 Id. at 198-199. Reduction of Personnel. - The employer may also terminate
the employment of any employee due to the installation of
[37]
 Supra note 2. labor-saving devices, redundancy, retrenchment to prevent
losses or the closing or cessation of operation of the
[38]
 Rollo (G.R. Nos. 182200-01), pp. 50-51. establishment or undertaking unless the closing is for the
purpose of circumventing the provisions of this Title, by
[39]
 Id. at 47. serving a written notice on the workers and the Ministry of
Labor and Employment at least one (I) month before the
[40]
 Id. at 47-48. intended date thereof. In case of termination due to the
installation of labor saving devices or redundancy, the
[41]
 See Robinsons Galleria/Robinsons Supermarket worker affected thereby shall be entitled to a separation pay
Corporation v. Ranchez, G.R. No. 177937, January 19, equivalent to at least his one (1) month pay or to at least one
2011, 640 SCRA 135, 142. (1) month pay for every year of service, whichever is
higher. In case of retrenchment to prevent losses and in
[42]
 LABOR CODE, Art. 297. Termination by Employer. - cases of closures or cessation of operations of establishment
An employer may terminate an employment for any of the or undertaking not due to serious business losses or
following causes: financial reverses, the separation pay shall be equivalent to
a) Serious misconduct or willful disobedience by the employee one (1) month pay or at least one-half (1/2) month pay for
of the lawful orders of his employer or representative in every year of service, whichever is higher. A fraction of at
connection with his work; least six (6) months shall be considered one (1) whole year.
b) Gross and habitual neglect by the employee of his duties; (As renumbered by Republic Act No. 10151.)
c) Fraud or willful breach by the employee of the trust reposed
in him by his employer or duly authorized representative; [44]
 See Carvajal v. Luzon Development Bank, G.R. No.
d) Commission of a crime or offense by the employee against
the person of his employer or any immediate member of his 186169, August 1, 2012, 678 SCRA 132; Article 296,
family or his duly authorized representatives; and formerly Article 281 of the Labor Code. (As renumbered by
Republic Act No. 10151.)
 [56]
 Id. at 174.
[45]
 Manlimos v. National Labor Relations Commission, G.R.
[57]
No. 113337, March 2, 1995, 242 SCRA 145, 155.  Id.
[46] [58]
 Rollo (G.R. Nos. 183200-01), p. 49.  G.R. No. 192571, July 23, 2013, 701 SCRA 682 and
April 22, 2014, 723 SCRA 25.
[47]
 See Asuncion v. National Labor Relations Commission,
[59]
G.R. No. 129329, July 31, 2001, 362 SCRA 56, 68.  G.R. No. 192571, July 23, 2013, 701 SCRA 682, 708-
709.
[48]
 G.R. No. 165153, August 25, 2010, 629 SCRA 77. 
[60]
 Id. at 709.
[49]
 Id. at 83.
[61]
 Rollo (G.R. Nos. 183200-01), pp. 111-112.
[50]
 Phil. Federation of Credit Cooperatives, Inc. v. NLRC,
[62]
G.R. No. 121071, December 11, 1998, 300 SCRA 72, 76.  Id. at 113-114.
[51] [63]
 LABOR CODE, Art. 296. (As renumbered by Republic  See Aberdeen Court, Inc. v. Agustin, Jr., G.R. No.
Act No. 10151.) 149371, April 13, 2005, 456 SCRA 32. 
[52] [64]
 Id.  See Robinsons Galleria/Robinsons Supermarket
Corporation v. Ranchez, G.R. No. 177937, January 19,
[53]
 Abbott Laboratories, Philippines v. Alcaraz, G.R. No. 2011, 640 SCRA 135, 145.
192571, July 23, 2013, 701 SCRA 682, 706-707.
[65]
 Yabut v. Manila Electric Company, G.R. No. 190436,
[54]
 Rollo (G.R. Nos. 183200-01), p. 130. January 16, 2012, 663 SCRA 92, 107-108.
[55] [66]
 Id. at 155-183.  See Mercado v. AMA Computer College Paranaque
City, Inc., G.R. No. 183572, April 13, 2010, 618 SCRA
 [76]
218, 238-241.  See INC Shipmanagement, Inc. v. Camporedondo, G.R.
No. 199931, September 7, 2015.
[67]
 Robinsons Galleria/Robinsons Supermarket Corporation
[77]
v. Ranches, supra note 41 citing the Omnibus Rules  Rollo (G.R. Nos. 183200-01), pp. 116-117.
Implementing the Labor Code, Book VI, Rule I, Sec. 6 (c).
[78]
 Id. at 122-123.
[68]
 Philippine Daily Inquirer, Inc. v. Magtibay, Jr., G.R. No.
[79]
164532, July 27, 2007, 528 SCRA 355, 364.  Universal Staffing Services, Inc. v. National Labor
Relations Commission, G.R. No. 177576, July 21, 2008,
[69]
 Id. 559 SCRA 221, 229.
[70] [80]
 Omnibus Rules Implementing the Labor Code, Book VI,  See St. Luke's Medical Center, Inc. v. Notario, G.R. No.
Rule I, Sec. 2 (d). 152166, October 20, 2010, 634 SCRA 67, 78.
[71] [81]
 Philippine Daily Inquirer v. Magtibay, Jr., supra.  Sang-an v. Equator Knights Detective and Security
Agency, Inc., G.R. No. 173189, February 13, 2013, 690
[72]
 See Colegio del Santisimo Rosario v. Rojo, G.R. No. SCRA 534, 544.
170388, September 4, 2013, 705 SCRA 63, 82.
[82]
 LABOR CODE, Art. 294. (As renumbered by Republic
[73]
 LABOR CODE, Art. 297, par. (b). (As renumbered by Act No. 10151.) 
Republic Act No. 10151.)
[83]
 G.R. No. 188722, February 1, 2012, 664 SCRA 772. 
[74]
 Aliling v. Feliciano, G.R. No. 185829, April 25, 2012,
[84]
671 SCRA 186, 206.  Id. at 780.
[75] [85]
 Buiser v. Leogardo, Jr., G.R. No. L-63316, July 31,  St. Joseph Academy of Valenzuela Faculty Association
1984, 131 SCRA 151, 158. (SJAVFA)-FUR Chapter-TUCP v. St. Joseph Academy of
Valenzuela, G.R. No. 182957, June 13, 2013, 698 SCRA
 [92]
342, 350.  Id., citing Laureano Investment and Development
Corporation v. Court of Appeals, G.R. No. 100468, May 6,
[86]
 Eastern Shipping Lines, Inc. v. Sedan, G.R. No. 159354, 1997, 272 SCRA 253.
April 7, 2006, 486 SCRA 565, 574-575, citing Calalang v.
[93]
Williams, 70 Phil. 726 (1940).  Id., citing Cathay Pacific Airways, Ltd. v. Vazquez, G.R.
No. 150843, March 14, 2003, 399 SCRA 207. 
[87]
 See Guatson International Travel and Tours, Inc. v.
[94]
NLRC, G.R. No. 100322, March 9, 1994, 230 SCRA 815,  Pasos v. Philippine National Construction Corporation,
824. G.R. No. 192394, July 3, 2013, 700 SCRA 608, 631.
[88] [95]
 Tangga-an v. Philippine Transmarine Carriers, Inc.,  Rollo (G.R. Nos. 183253 & 183257), p. 47.
G.R. No. 180636, March 13, 2013, 693 SCRA 340, 355-
[96]
356.  Id. at 45-46.
[89] [97]
 Id.  Rollo (G.R. Nos. 183200-01), pp. 120 and 123.
[90] [98]
 Art. 111. Attorney's Fees. - (a) In cases of unlawful  Id. at 178-179.
withholding of wages, the culpable party may be assessed
[99]
attorney's fees equivalent to ten percent of the amount of  Id. at 152.
wages recovered.
[100]
 See Magsaysay Maritime Corporation v. Chin, Jr., G.R.
xxx No. 199022, April 7, 2014, 721 SCRA 46, 51.
[91] [101]
 Montinola v. Philippine Airlines, G.R. No. 198656,  G.R. No. 199022, April 7, 2014, 721 SCRA 46.
September 8, 2014, 734 SCRA 439, 458, citing Primero v.
[102]
Intermediate Appellate Court, G.R. No. L-72644, December  Id. at 51-52.
14, 1987, 156 SCRA 435.
[103]
 Polymer Rubber Corporation v. Salamuding, G.R. No.
185160, July 24, 2013, 702 SCRA 153, 160, citing Peñaflor
v. Outdoor Clothing Manufacturing Corporation, G.R. No.
177114, April 13, 2010, 618 SCRA 208, 216.
[104]
 Polymer Rubber Corporation v. Salamuding, G.R. No.
185160, July 24, 2013, 702 SCRA 153, 161,
citing Francisco v. Mallen, Jr., G.R. No. 173169,
September 22, 2010, 631 SCRA 118, 123-124.
[105]
 See Peñaflor v. Outdoor Clothing Manufacturing
Corporation, G.R. No. 177114, January 21, 2010, 610
SCRA 497.

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