EFECTIVITY OF LAWS The issue posed is not one of first impression.
is not one of first impression. As early as the conceive of any other person to initiate the same, considering
TAÑADA VS TUVERA
ESCOLIN, J.:
Invoking the people's right to be informed on matters of public
concern, a right recognized in Section 6, Article IV of the 1973
Philippine Constitution, 1 as well as the principle that laws to be
valid and enforceable must be published in the Official Gazette
or otherwise effectively promulgated, petitioners seek a writ of
mandamus to compel respondent public officials to publish,
and/or cause the publication in the Official Gazette of various
presidential decrees, letters of instructions, general orders,
proclamations, executive orders, letter of implementation and
administrative orders.
The respondents, through the Solicitor General, would have
this case dismissed outright on the ground that petitioners
have no legal personality or standing to bring the instant
petition. The view is submitted that in the absence of any
showing that petitioners are personally and directly affected or
prejudiced by the alleged non-publication of the presidential
issuances in question 2 said petitioners are without the
requisite legal personality to institute this mandamus
proceeding, they are not being "aggrieved parties" within the
meaning of Section 3, Rule 65 of the Rules of Court, which we
quote:
SEC. 3. Petition for Mandamus.—When any tribunal,
corporation, board or person unlawfully neglects the
performance of an act which the law specifically enjoins as a
duty resulting from an office, trust, or station, or unlawfully
excludes another from the use a rd enjoyment of a right or
office to which such other is entitled, and there is no other
plain, speedy and adequate remedy in the ordinary course of
law, the person aggrieved thereby may file a verified petition in
the proper court alleging the facts with certainty and praying
that judgment be rendered commanding the defendant,
immediately or at some other specified time, to do the act
required to be done to Protect the rights of the petitioner, and
to pay the damages sustained by the petitioner by reason of
the wrongful acts of the defendant.
Upon the other hand, petitioners maintain that since the
subject of the petition concerns a public right and its object is
to compel the performance of a public duty, they need not
show any specific interest for their petition to be given due
course.
1910 case of Severino vs. Governor General, 3 this Court held that the Solicitor General, the government officer generally
that while the general rule is that "a writ of mandamus would empowered to represent the people, has entered his
be granted to a private individual only in those cases where he appearance for respondents in this case.
has some private or particular interest to be subserved, or some
particular right to be protected, independent of that which he Respondents further contend that publication in the Official
Gazette is not a sine qua non requirement for the effectivity of
holds with the public at large," and "it is for the public officers
laws where the laws themselves provide for their own
exclusively to apply for the writ when public rights are to be
effectivity dates. It is thus submitted that since the presidential
subserved [Mithchell vs. Boardmen, 79 M.e., 469],"
issuances in question contain special provisions as to the date
nevertheless, "when the question is one of public right and the
they are to take effect, publication in the Official Gazette is not
object of the mandamus is to procure the enforcement of a
indispensable for their effectivity. The point stressed is
public duty, the people are regarded as the real party in interest
anchored on Article 2 of the Civil Code:
and the relator at whose instigation the proceedings are
instituted need not show that he has any legal or special
Art. 2. Laws shall take effect after fifteen days following the
interest in the result, it being sufficient to show that he is a
completion of their publication in the Official Gazette, unless it
citizen and as such interested in the execution of the laws
is otherwise provided, ...
[High, Extraordinary Legal Remedies, 3rd ed., sec. 431].
The interpretation given by respondent is in accord with this
Thus, in said case, this Court recognized the relator Lope
Court's construction of said article. In a long line of decisions,4
Severino, a private individual, as a proper party to the
this Court has ruled that publication in the Official Gazette is
mandamus proceedings brought to compel the Governor
necessary in those cases where the legislation itself does not
General to call a special election for the position of municipal
provide for its effectivity date-for then the date of publication is
president in the town of Silay, Negros Occidental. Speaking for
material for determining its date of effectivity, which is the
this Court, Mr. Justice Grant T. Trent said:
fifteenth day following its publication-but not when the law
We are therefore of the opinion that the weight of authority itself provides for the date when it goes into effect.
supports the proposition that the relator is a proper party to
Respondents' argument, however, is logically correct only
proceedings of this character when a public right is sought to
insofar as it equates the effectivity of laws with the fact of
be enforced. If the general rule in America were otherwise, we
publication. Considered in the light of other statutes applicable
think that it would not be applicable to the case at bar for the
to the issue at hand, the conclusion is easily reached that said
reason 'that it is always dangerous to apply a general rule to a
Article 2 does not preclude the requirement of publication in
particular case without keeping in mind the reason for the rule,
the Official Gazette, even if the law itself provides for the date
because, if under the particular circumstances the reason for
of its effectivity. Thus, Section 1 of Commonwealth Act 638
the rule does not exist, the rule itself is not applicable and
provides as follows:
reliance upon the rule may well lead to error'
Section 1. There shall be published in the Official Gazette
No reason exists in the case at bar for applying the general rule
insisted upon by counsel for the respondent. The circumstances [1] all important legisiative acts and resolutions of a public
which surround this case are different from those in the United nature of the, Congress of the Philippines;
States, inasmuch as if the relator is not a proper party to these
proceedings no other person could be, as we have seen that it is [2] all executive and administrative orders and proclamations,
not the duty of the law officer of the Government to appear and except such as have no general applicability;
represent the people in cases of this character.
[3] decisions or abstracts of decisions of the Supreme Court and
The reasons given by the Court in recognizing a private citizen's the Court of Appeals as may be deemed by said courts of
legal personality in the aforementioned case apply squarely to sufficient importance to be so published;
the present petition. Clearly, the right sought to be enforced by
petitioners herein is a public right recognized by no less than [4] such documents or classes of documents as may be required
the fundamental law of the land. If petitioners were not allowed so to be published by law; and
to institute this proceeding, it would indeed be difficult to
[5] such documents or classes of documents as the President of
the Philippines shall determine from time to time to have
general applicability and legal effect, or which he may
authorize so to be published. ...
The clear object of the above-quoted provision is to give the
general public adequate notice of the various laws which are to
regulate their actions and conduct as citizens. Without such
notice and publication, there would be no basis for the
application of the maxim "ignorantia legis non excusat." It
would be the height of injustice to punish or otherwise burden a
citizen for the transgression of a law of which he had no notice
whatsoever, not even a constructive one.
Perhaps at no time since the establishment of the Philippine
Republic has the publication of laws taken so vital significance
that at this time when the people have bestowed upon the
President a power heretofore enjoyed solely by the legislature.
While the people are kept abreast by the mass media of the
debates and deliberations in the Batasan Pambansa—and for
the diligent ones, ready access to the legislative records—no
such publicity accompanies the law-making process of the
President. Thus, without publication, the people have no
means of knowing what presidential decrees have actually
been promulgated, much less a definite way of informing
themselves of the specific contents and texts of such decrees.
The very first clause of Section I of Commonwealth Act 638
reads: "There shall be published in the Official Gazette ... ." The
word "shall" used therein imposes upon respondent officials an
imperative duty. That duty must be enforced if the
Constitutional right of the people to be informed on matters of
public concern is to be given substance and reality. The law
itself makes a list of what should be published in the Official
Gazette. Such listing, to our mind, leaves respondents with no
discretion whatsoever as to what must be included or excluded
from such publication.
The publication of all presidential issuances "of a public nature"
or "of general applicability" is mandated by law. Obviously,
presidential decrees that provide for fines, forfeitures or
penalties for their violation or otherwise impose a burden or.
the people, such as tax and revenue measures, fall within this
category. Other presidential issuances which apply only to
particular persons or class of persons such as administrative
and executive orders need not be published on the assumption
that they have been circularized to all concerned. 6
It is needless to add that the publication of presidential
issuances "of a public nature" or "of general applicability" is a
requirement of due process. It is a rule of law that before a
person may be bound by law, he must first be officially and
specifically informed of its contents. As Justice Claudio
Teehankee said in Peralta vs. COMELEC 7:
In a time of proliferating decrees, orders and letters of
instructions which all form part of the law of the land, the
requirement of due process and the Rule of Law demand that
the Official Gazette as the official government repository
promulgate and publish the texts of all such decrees, orders
and instructions so that the people may know where to obtain
their official and specific contents.
The Court therefore declares that presidential issuances of
general application, which have not been published, shall have
no force and effect. Some members of the Court, quite
apprehensive about the possible unsettling effect this decision
might have on acts done in reliance of the validity of those
presidential decrees which were published only during the
pendency of this petition, have put the question as to whether
the Court's declaration of invalidity apply to P.D.s which had
been enforced or implemented prior to their publication. The
answer is all too familiar. In similar situations in the past this
Court had taken the pragmatic and realistic course set forth in
Chicot County Drainage District vs. Baxter Bank 8 to wit:
The courts below have proceeded on the theory that the Act of
Congress, having been found to be unconstitutional, was not a
law; that it was inoperative, conferring no rights and imposing
no duties, and hence affording no basis for the challenged
decree. Norton v. Shelby County, 118 U.S. 425, 442; Chicago, 1.
& L. Ry. Co. v. Hackett, 228 U.S. 559, 566. It is quite clear,
however, that such broad statements as to the effect of a
determination of unconstitutionality must be taken with
qualifications. The actual existence of a statute, prior to such a
determination, is an operative fact and may have consequences
which cannot justly be ignored. The past cannot always be
erased by a new judicial declaration. The effect of the
subsequent ruling as to invalidity may have to be considered in
various aspects-with respect to particular conduct, private and
official. Questions of rights claimed to have become vested, of
status, of prior determinations deemed to have finality and
acted upon accordingly, of public policy in the light of the
nature both of the statute and of its previous application,
demand examination. These questions are among the most
difficult of those which have engaged the attention of courts,
state and federal and it is manifest from numerous decisions
that an all-inclusive statement of a principle of absolute
retroactive invalidity cannot be justified.
Consistently with the above principle, this Court in Rutter vs.
Esteban 9 sustained the right of a party under the Moratorium
Law, albeit said right had accrued in his favor before said law
was declared unconstitutional by this Court.
Similarly, the implementation/enforcement of presidential
decrees prior to their publication in the Official Gazette is "an
operative fact which may have consequences which cannot be
justly ignored. The past cannot always be erased by a new
judicial declaration ... that an all-inclusive statement of a
principle of absolute retroactive invalidity cannot be justified."
From the report submitted to the Court by the Clerk of Court, it
appears that of the presidential decrees sought by petitioners
to be published in the Official Gazette, only Presidential
Decrees Nos. 1019 to 1030, inclusive, 1278, and 1937 to 1939,
inclusive, have not been so published. 10 Neither the subject
matters nor the texts of these PDs can be ascertained since no
copies thereof are available. But whatever their subject matter
may be, it is undisputed that none of these unpublished PDs
has ever been implemented or enforced by the government. In
Pesigan vs. Angeles, 11 the Court, through Justice Ramon
Aquino, ruled that "publication is necessary to apprise the
public of the contents of [penal] regulations and make the said
penalties binding on the persons affected thereby. " The
cogency of this holding is apparently recognized by respondent
officials considering the manifestation in their comment that
"the government, as a matter of policy, refrains from
prosecuting violations of criminal laws until the same shall have
been published in the Official Gazette or in some other
publication, even though some criminal laws provide that they
shall take effect immediately.
WHEREFORE, the Court hereby orders respondents to publish
in the Official Gazette all unpublished presidential issuances
which are of general application, and unless so published, they
shall have no binding force and effect.
SO ORDERED.

DE ROY VS CA
CORTES, J.:
This special civil action for certiorari seeks to declare null and
void two (2) resolutions of the Special First Division of the Court
of Appeals in the case of Luis Bernal, Sr., et al. v. Felisa Perdosa
De Roy, et al., CA-G.R. CV No. 07286. The first resolution
promulgated on 30 September 1987 denied petitioners' motion
for extension of time to file a motion for reconsideration and
directed entry of judgment since the decision in said case had
become final; and the second Resolution dated 27 October
1987 denied petitioners' motion for reconsideration for having
been filed out of time.
At the outset, this Court could have denied the petition
outright for not being verified as required by Rule 65 section 1
of the Rules of Court. However, even if the instant petition did
not suffer from this defect, this Court, on procedural and
substantive grounds, would still resolve to deny it.
The facts of the case are undisputed. The firewall of a burned-
out building owned by petitioners collapsed and destroyed the
tailoring shop occupied by the family of private respondents,
resulting in injuries to private respondents and the death of
Marissa Bernal, a daughter. Private respondents had been
warned by petitioners to vacate their shop in view of its
proximity to the weakened wall but the former failed to do so.
On the basis of the foregoing facts, the Regional Trial Court.
First Judicial Region, Branch XXXVIII, presided by the Hon.
Antonio M. Belen, rendered judgment finding petitioners guilty
of gross negligence and awarding damages to private
respondents. On appeal, the decision of the trial court was
affirmed in toto by the Court of Appeals in a decision
promulgated on August 17, 1987, a copy of which was received
by petitioners on August 25, 1987. On September 9, 1987, the
last day of the fifteen-day period to file an appeal, petitioners
filed a motion for extension of time to file a motion for
reconsideration, which was eventually denied by the appellate
court in the Resolution of September 30, 1987. Petitioners filed
their motion for reconsideration on September 24, 1987 but
this was denied in the Resolution of October 27, 1987.
This Court finds that the Court of Appeals did not commit a
grave abuse of discretion when it denied petitioners' motion for
extension of time to file a motion for reconsideration, directed
entry of judgment and denied their motion for reconsideration.
It correctly applied the rule laid down in Habaluyas Enterprises,
Inc. v. Japzon, [G.R. No. 70895, August 5, 1985,138 SCRA 461,
that the fifteen-day period for appealing or for filing a motion
for reconsideration cannot be extended. In its Resolution
denying the motion for reconsideration, promulgated on July
30, 1986 (142 SCRA 208), this Court en banc restated and
clarified the rule, to wit:
Beginning one month after the promulgation of this
Resolution, the rule shall be strictly enforced that no motion for
extension of time to file a motion for reconsideration may be
filed with the Metropolitan or Municipal Trial Courts, the
Regional Trial Courts, and the Intermediate Appellate Court.
Such a motion may be filed only in cases pending with the
Supreme Court as the court of last resort, which may in its
sound discretion either grant or deny the extension requested.
(at p. 212)
Lacsamana v. Second Special Cases Division of the
intermediate Appellate Court, [G.R. No. 73146-53, August 26,
1986, 143 SCRA 643], reiterated the rule and went further to
restate and clarify the modes and periods of appeal.
Bacaya v. Intermediate Appellate Court, [G.R. No. 74824, Sept.
15, 1986,144 SCRA 161],stressed the prospective application of
said rule, and explained the operation of the grace period, to
wit:
In other words, there is a one-month grace period from the
promulgation on May 30, 1986 of the Court's Resolution in the
clarificatory Habaluyas case, or up to June 30, 1986, within
which the rule barring extensions of time to file motions for
new trial or reconsideration is, as yet, not strictly enforceable.
Since petitioners herein filed their motion for extension on
February 27, 1986, it is still within the grace period, which
expired on June 30, 1986, and may still be allowed.
This grace period was also applied in Mission v. Intermediate
Appellate Court [G.R. No. 73669, October 28, 1986, 145 SCRA
306].]
In the instant case, however, petitioners' motion for extension
of time was filed on September 9, 1987, more than a year after
the expiration of the grace period on June 30, 1986. Hence, it is
no longer within the coverage of the grace period. Considering
the length of time from the expiration of the grace period to
the promulgation of the decision of the Court of Appeals on
August 25, 1987, petitioners cannot seek refuge in the
ignorance of their counsel regarding said rule for their failure to
file a motion for reconsideration within the reglementary
period.
Petitioners contend that the rule enunciated in the Habaluyas
case should not be made to apply to the case at bar owing to
the non-publication of the Habaluyas decision in the Official
Gazette as of the time the subject decision of the Court of
Appeals was promulgated. Contrary to petitioners' view, there
is no law requiring the publication of Supreme Court decisions
in the Official Gazette before they can be binding and as a
condition to their becoming effective. It is the bounden duty of
counsel as lawyer in active law practice to keep abreast of
decisions of the Supreme Court particularly where issues have
been clarified, consistently reiterated, and published in the
advance reports of Supreme Court decisions (G. R. s) and in
such publications as the Supreme Court Reports Annotated
(SCRA) and law journals.
This Court likewise finds that the Court of Appeals committed
no grave abuse of discretion in affirming the trial court's
decision holding petitioner liable under Article 2190 of the Civil
Code, which provides that "the proprietor of a building or
structure is responsible for the damage resulting from its total
or partial collapse, if it should be due to the lack of necessary
repairs.
Nor was there error in rejecting petitioners argument that
private respondents had the "last clear chance" to avoid the
accident if only they heeded the. warning to vacate the
tailoring shop and , therefore, petitioners prior negligence
should be disregarded, since the doctrine of "last clear chance,"
which has been applied to vehicular accidents, is inapplicable to
this case.
WHEREFORE, in view of the foregoing, the Court Resolved to
DENY the instant petition for lack of merit.

PROSPECTIVITY OF LAWS
ATIENZA VS BRILLANTES
QUIASON, J.:
This is a complaint by Lupo A. Atienza for Gross Immorality and
Appearance of Impropriety against Judge Francisco Brillantes,
Jr., Presiding Judge of the Metropolitan Trial Court, Branch 20,
Manila.
Complainant alleges that he has two children with Yolanda De
Castro, who are living together at No. 34 Galaxy Street, Bel-Air
Subdivision, Makati, Metro Manila. He stays in said house,
which he purchased in 1987, whenever he is in Manila.
In December 1991, upon opening the door to his bedroom, he
saw respondent sleeping on his (complainant's) bed. Upon
inquiry, he was told by the houseboy that respondent had been
cohabiting with De Castro. Complainant did not bother to wake
up respondent and instead left the house after giving
instructions to his houseboy to take care of his children.
Thereafter, respondent prevented him from visiting his children
and even alienated the affection of his children for him.
Complainant claims that respondent is married to one Zenaida
Ongkiko with whom he has five children, as appearing in his
1986 and 1991 sworn statements of assets and liabilities.
Furthermore, he alleges that respondent caused his arrest on
January 13, 1992, after he had a heated argument with De
Castro inside the latter's office.
For his part, respondent alleges that complainant was not
married to De Castro and that the filing of the administrative
action was related to complainant's claim on the Bel-Air
residence, which was disputed by De Castro.
Respondent denies that he caused complainant's arrest and
claims that he was even a witness to the withdrawal of the
complaint for Grave Slander filed by De Castro against
complainant. According to him, it was the sister of De Castro
who called the police to arrest complainant.
Respondent also denies having been married to Ongkiko,
although he admits having five children with her. He alleges
that while he and Ongkiko went through a marriage ceremony
before a Nueva Ecija town mayor on April 25, 1965, the same
was not a valid marriage for lack of a marriage license. Upon
the request of the parents of Ongkiko, respondent went
through another marriage ceremony with her in Manila on June
5, 1965. Again, neither party applied for a marriage license.
Ongkiko abandoned respondent 17 years ago, leaving their
children to his care and custody as a single parent.
Respondent claims that when he married De Castro in civil rites
in Los Angeles, California on December 4, 1991, he believed, in
all good faith and for all legal intents and purposes, that he was
single because his first marriage was solemnized without a
license.
Under the Family Code, there must be a judicial declaration of
the nullity of a previous marriage before a party thereto can
enter into a second marriage. Article 40 of said Code provides:
The absolute nullity of a previous marriage may be invoked for
the purposes of remarriage on the basis solely of a final
judgment declaring such previous marriage void.
Respondent argues that the provision of Article 40 of the
Family Code does not apply to him considering that his first
marriage took place in 1965 and was governed by the Civil Code
of the Philippines; while the second marriage took place in 1991
and governed by the Family Code.
Article 40 is applicable to remarriages entered into after the
effectivity of the Family Code on August 3, 1988 regardless of
the date of the first marriage. Besides, under Article 256 of the
Family Code, said Article is given "retroactive effect insofar as it
does not prejudice or impair vested or acquired rights in
accordance with the Civil Code or other laws." This is
particularly true with Article 40, which is a rule of procedure.
Respondent has not shown any vested right that was impaired
by the application of Article 40 to his case.
The fact that procedural statutes may somehow affect the
litigants' rights may not preclude their retroactive application
to pending actions. The retroactive application of procedural
laws is not violative of any right of a person who may feel that
he is adversely affected (Gregorio v. Court of Appeals, 26 SCRA
229 [1968]). The reason is that as a general rule no vested right
may attach to, nor arise from, procedural laws (Billones v. Court
of Industrial Relations, 14 SCRA 674 [1965]).
Respondent is the last person allowed to invoke good faith. He
made a mockery of the institution of marriage and employed
deceit to be able to cohabit with a woman, who beget him five
children.
Respondent passed the Bar examinations in 1962 and was
admitted to the practice of law in 1963. At the time he went
through the two marriage ceremonies with Ongkiko, he was
already a lawyer. Yet, he never secured any marriage license.
Any law student would know that a marriage license is
necessary before one can get married. Respondent was given
an opportunity to correct the flaw in his first marriage when he
and Ongkiko were married for the second time. His failure to
secure a marriage license on these two occasions betrays his
sinister motives and bad faith.
It is evident that respondent failed to meet the standard of
moral fitness for membership in the legal profession.
While the deceit employed by respondent existed prior to his
appointment as a Metropolitan Trial Judge, his immoral and
illegal act of cohabiting with De Castro began and continued
when he was already in the judiciary.
The Code of Judicial Ethics mandates that the conduct of a
judge must be free of a whiff of impropriety, not only with
respect to his performance of his judicial duties but also as to
his behavior as a private individual. There is no duality of
morality. A public figure is also judged by his private life. A
judge, in order to promote public confidence in the integrity
and impartiality of the judiciary, must behave with propriety at
all times, in the performance of his judicial duties and in his
everyday life. These are judicial guideposts too self-evident to
be overlooked. No position exacts a greater demand on moral
righteousness and uprightness of an individual than a seat in
the judiciary (Imbing v. Tiongzon, 229 SCRA 690 [1994]).
WHEREFORE, respondent is DISMISSED from the service with
forfeiture of all leave and retirement benefits and with
prejudice to reappointment in any branch, instrumentality, or
agency of the government, including government-owned and
controlled corporations. This decision is immediately
executory.
SO ORDERED.

CARLOS VS SANDOVAL
REYES, R.T., J.:
ONLY a spouse can initiate an action to sever the marital bond
for marriages solemnized during the effectivity of the Family
Code, except cases commenced prior to March 15, 2003. The
nullity and annulment of a marriage cannot be declared in a
judgment on the pleadings, summary judgment, or confession
of judgment.
We pronounce these principles as We review on certiorari the
Decision1 of the Court of Appeals (CA) which reversed and set
aside the summary judgment2 of the Regional Trial Court (RTC)
in an action for declaration of nullity of marriage, status of a
child, recovery of property, reconveyance, sum of money, and
damages.
The Facts
The events that led to the institution of the instant suitare
unveiled as follows:
Spouses Felix B. Carlos and Felipa Elemia died intestate. They
left six parcels of land to their compulsory heirs, Teofilo Carlos
and petitioner Juan De Dios Carlos.
During the lifetime of Felix Carlos, he agreed to transfer his
estate to Teofilo. The agreement was made in order to avoid
the payment of inheritance taxes. Teofilo, in turn, undertook to
deliver and turn over the share of the other legal heir, petitioner
Juan De Dios Carlos.
Eventually, the first three (3) parcels of land were transferred
and registered in the name of Teofilo. These three (3) lots are
now covered by Transfer Certificate of Title (TCT) No. 234824
issued by the Registry of Deeds of Makati City; TCT No. 139061
issued by the Registry of Deeds of Makati City; and TCT No.
139058 issued by the Registry of Deeds of Makati City.
Parcel No. 4 was registered in the name of petitioner. The lot is
now covered by TCT No. 160401 issued by the Registry of
Deeds of Makati City.
On May 13, 1992, Teofilo died intestate. He was survived by
respondents Felicidad and their son, Teofilo Carlos II (Teofilo II).
Upon Teofilo's death, Parcel Nos. 5 & 6 were registered in the
name of respondent Felicidad and co-respondent, Teofilo II.
The said two (2) parcels of land are covered by TCT Nos. 219877
and 210878, respectively, issued by the Registry of Deeds of
Manila.
In 1994, petitioner instituted a suit against respondents before
the RTC in Muntinlupa City, docketed as Civil Case No. 94-
1964. In the said case, the parties submitted and caused the
approval of a partial compromise agreement. Under the
compromise, the parties acknowledged their respective shares
in the proceeds from the sale of a portion of the first parcel of
land. This includes the remaining 6,691-square-meter portion
of said land.
On September 17, 1994, the parties executed a deed of
extrajudicial partition, dividing the remaining land of the first
parcel between them.
Meanwhile, in a separate case entitled Rillo v. Carlos,4 2,331
square meters of the second parcel of land were adjudicated in
favor of plaintiffs Rillo. The remaining 10,000-square meter
portion was later divided between petitioner and respondents.
The division was incorporated in a supplemental compromise
agreement executed on August 17, 1994, with respect to Civil
Case No. 94-1964. The parties submitted the supplemental
compromise agreement, which was approved accordingly.
Petitioner and respondents entered into two more contracts in
August 1994. Under the contracts, the parties equally divided
between them the third and fourth parcels of land.
In August 1995, petitioner commenced an action, docketed as
Civil Case No. 95-135, against respondents before the court a
quo with the following causes of action: (a) declaration of
nullity of marriage; (b) status of a child; (c) recovery of
property; (d) reconveyance; and (e) sum of money and
damages. The complaint was raffled to Branch 256 of the RTC
in Muntinlupa.
In his complaint, petitioner asserted that the marriage between
his late brother Teofilo and respondent Felicidad was a nullity
in view of the absence of the required marriage license. He
likewise maintained that his deceased brother was neither the
natural nor the adoptive father of respondent Teofilo Carlos II.
Petitioner likewise sought the avoidance of the contracts he
entered into with respondent Felicidad with respect to the
subject real properties. He also prayed for the cancellation of
the certificates of title issued in the name of respondents. He
argued that the properties covered by such certificates of title,
including the sums received by respondents as proceeds,
should be reconveyed to him.
Finally, petitioner claimed indemnification as and by way of
moral and exemplary damages, attorney's fees, litigation
expenses, and costs of suit.
On October 16, 1995, respondents submitted their answer.
They denied the material averments of petitioner's complaint.
Respondents contended that the dearth of details regarding
the requisite marriage license did not invalidate Felicidad's
marriage to Teofilo. Respondents declared that Teofilo II was
the illegitimate child of the deceased Teofilo Carlos with
another woman.
On the grounds of lack of cause of action and lack of
jurisdiction over the subject matter, respondents prayed for the
dismissal of the case before the trial court. They also asked that
their counterclaims for moral and exemplary damages, as well
as attorney's fees, be granted.
But before the parties could even proceed to pre-trial,
respondents moved for summary judgment. Attached to the
motion was the affidavit of the justice of the peace who
solemnized the marriage. Respondents also submitted the
Certificate of Live Birth of respondent Teofilo II. In the
certificate, the late Teofilo Carlos and respondent Felicidad
were designated as parents.
On January 5, 1996, petitioner opposed the motion for
summary judgment on the ground of irregularity of the
contract evidencing the marriage. In the same breath,
petitioner lodged his own motion for summary judgment.
Petitioner presented a certification from the Local Civil
Registrar of Calumpit, Bulacan, certifying that there is no
record of birth of respondent Teofilo II.
Petitioner also incorporated in the counter-motion for
summary judgment the testimony of respondent Felicidad in
another case. Said testimony was made in Civil Case No. 89-
2384, entitled Carlos v. Gorospe, before the RTC Branch 255,
Las Piñas. In her testimony, respondent Felicidad narrated that
co-respondent Teofilo II is her child with Teofilo.5
Subsequently, the Office of the City Prosecutor of Muntinlupa
submitted to the trial court its report and manifestation,
discounting the possibility of collusion between the parties.
 RTC and CA Dispositions
On April 8, 1996, the RTC rendered judgment, disposing as
follows:
WHEREFORE, premises considered, defendant's (respondent's)
Motion for Summary Judgment is hereby denied. Plaintiff's
(petitioner's) Counter-Motion for Summary Judgment is hereby
granted and summary judgment is hereby rendered in favor of
plaintiff as follows:
1. Declaring the marriage between defendant Felicidad
Sandoval and Teofilo Carlos solemnized at Silang, Cavite on
May 14, 1962, evidenced by the Marriage Certificate submitted
in this case, null and void ab initio for lack of the requisite
marriage license;
2. Declaring that the defendant minor, Teofilo S. Carlos II, is not
the natural, illegitimate, or legally adopted child of the late
Teofilo E. Carlos;
3. Ordering defendant Sandoval to pay and restitute to plaintiff
the sum of P18,924,800.00 together with the interest thereon
at the legal rate from date of filing of the instant complaint
until fully paid;
4. Declaring plaintiff as the sole and exclusive owner of the
parcel of land, less the portion adjudicated to plaintiffs in Civil
Case No. 11975, covered by TCT No. 139061 of the Register of
Deeds of Makati City, and ordering said Register of Deeds to
cancel said title and to issue another title in the sole name of
plaintiff herein;
5. Declaring the Contract, Annex "K" of complaint, between
plaintiff and defendant Sandoval null and void, and ordering
the Register of Deeds of Makati City to cancel TCT No. 139058
in the name of Teofilo Carlos, and to issue another title in the
sole name of plaintiff herein;
6. Declaring the Contract, Annex M of the complaint, between
plaintiff and defendant Sandoval null and void;
7. Ordering the cancellation of TCT No. 210877 in the names of
defendant Sandoval and defendant minor Teofilo S. Carlos II
and ordering the Register of Deeds of Manila to issue another
title in the exclusive name of plaintiff herein;
8. Ordering the cancellation of TCT No. 210878 in the name of
defendant Sandoval and defendant Minor Teofilo S. Carlos II
and ordering the Register of Deeds of Manila to issue another
title in the sole name of plaintiff herein.
Dissatisfied, respondents appealed to the CA. In the appeal,
respondents argued, inter alia, that the trial court acted
without or in excess of jurisdiction in rendering summary
judgment annulling the marriage of Teofilo, Sr. and Felicidad
and in declaring Teofilo II as not an illegitimate child of Teofilo,
Sr.
On October 15, 2002, the CA reversed and set aside the RTC
ruling, disposing as follows:
WHEREFORE, the summary judgment appealed from is
REVERSED and SET ASIDE and in lieu thereof, a new one is
entered REMANDING the case to the court of origin for further
proceedings.
SO ORDERED.
The CA opined:
We find the rendition of the herein appealed summary
judgment by the court a quo contrary to law and public policy
as ensconced in the aforesaid safeguards. The fact that it was
appellants who first sought summary judgment from the trial
court, did not justify the grant thereof in favor of appellee. Not
being an action "to recover upon a claim" or "to obtain a
declaratory relief," the rule on summary judgment apply (sic) to
an action to annul a marriage. The mere fact that no genuine
issue was presented and the desire to expedite the disposition
of the case cannot justify a misinterpretation of the rule. The
first paragraph of Article 88 and 101 of the Civil Code expressly
prohibit the rendition of decree of annulment of a marriage
upon a stipulation of facts or a confession of judgment. Yet, the
affidavits annexed to the petition for summary judgment
practically amount to these methods explicitly proscribed by
the law.
We are not unmindful of appellee's argument that the
foregoing safeguards have traditionally been applied to prevent
collusion of spouses in the matter of dissolution of marriages
and that the death of Teofilo Carlos on May 13, 1992 had
effectively dissolved the marriage herein impugned. The fact,
however, that appellee's own brother and appellant Felicidad
Sandoval lived together as husband and wife for thirty years
and that the annulment of their marriage is the very means by
which the latter is sought to be deprived of her participation in
the estate left by the former call for a closer and more thorough
inquiry into the circumstances surrounding the case. Rather
that the summary nature by which the court a quo resolved the
issues in the case, the rule is to the effect that the material facts
alleged in the complaint for annulment of marriage should
always be proved. Section 1, Rule 19 of the Revised Rules of
Court provides:
"Section 1. Judgment on the pleadings. - Where an answer fails
to tender an issue, or otherwise admits the material allegations
of the adverse party's pleading, the court may, on motion of
that party, direct judgment on such pleading. But in actions for
annulment of marriage or for legal separation, the material
facts alleged in the complaint shall always be proved."
Moreover, even if We were to sustain the applicability of the
rules on summary judgment to the case at bench, Our perusal
of the record shows that the finding of the court a quo for
appellee would still not be warranted. While it may be readily
conceded that a valid marriage license is among the formal
requisites of marriage, the absence of which renders the
marriage void ab initio pursuant to Article 80(3) in relation to
Article 58 of the Civil Code the failure to reflect the serial
number of the marriage license on the marriage contract
evidencing the marriage between Teofilo Carlos and appellant
Felicidad Sandoval, although irregular, is not as fatal as
appellee represents it to be. Aside from the dearth of evidence
to the contrary, appellant Felicidad Sandoval's affirmation of
the existence of said marriage license is corroborated by the
following statement in the affidavit executed by Godofredo
Fojas, then Justice of the Peace who officiated the impugned
marriage, to wit:
"That as far as I could remember, there was a marriage license
issued at Silang, Cavite on May 14, 1962 as basis of the said
marriage contract executed by Teofilo Carlos and Felicidad
Sandoval, but the number of said marriage license was
inadvertently not placed in the marriage contract for the reason
that it was the Office Clerk who filled up the blanks in the
Marriage Contract who in turn, may have overlooked the
same."
Rather than the inferences merely drawn by the trial court, We
are of the considered view that the veracity and credibility of
the foregoing statement as well as the motivations underlying
the same should be properly threshed out in a trial of the case
on the merits.
If the non-presentation of the marriage contract - the primary
evidence of marriage - is not proof that a marriage did not take
place, neither should appellants' non-presentation of the
subject marriage license be taken as proof that the same was
not procured. The burden of proof to show the nullity of the
marriage, it must be emphasized, rests upon the plaintiff and
any doubt should be resolved in favor of the validity of the
marriage.
Considering that the burden of proof also rests on the party
who disputes the legitimacy of a particular party, the same may
be said of the trial court's rejection of the relationship between
appellant Teofilo Carlos II and his putative father on the basis of
the inconsistencies in appellant Felicidad Sandoval's
statements. Although it had effectively disavowed appellant's
prior claims regarding the legitimacy of appellant Teofilo Carlos
II, the averment in the answer that he is the illegitimate son of
appellee's brother, to Our mind, did not altogether foreclose
the possibility of the said appellant's illegitimate filiation, his
right to prove the same or, for that matter, his entitlement to
inheritance rights as such.
Without trial on the merits having been conducted in the case,
We find appellee's bare allegation that appellant Teofilo Carlos
II was merely purchased from an indigent couple by appellant
Felicidad Sandoval, on the whole, insufficient to support what
could well be a minor's total forfeiture of the rights arising from
his putative filiation. Inconsistent though it may be to her
previous statements, appellant Felicidad Sandoval's declaration
regarding the illegitimate filiation of Teofilo Carlos II is more
credible when considered in the light of the fact that, during
the last eight years of his life, Teofilo Carlos allowed said
appellant the use of his name and the shelter of his household.
The least that the trial court could have done in the premises
was to conduct a trial on the merits in order to be able to
thoroughly resolve the issues pertaining to the filiation of
appellant Teofilo Carlos II.8
On November 22, 2006, petitioner moved for reconsideration
and for the inhibition of the ponente, Justice Rebecca De Guia-
Salvador. The CA denied the twin motions.
Issues
In this petition under Rule 45, petitioner hoists the following
issues:
1. That, in reversing and setting aside the Summary Judgment
under the Decision, Annex A hereof, and in denying petitioner's
Motion for reconsideration under the Resolution, Annex F
hereof, with respect to the nullity of the impugned marriage,
petitioner respectfully submits that the Court of Appeals
committed a grave reversible error in applying Articles 88 and
101 of the Civil Code, despite the fact that the circumstances of
this case are different from that contemplated and intended by
law, or has otherwise decided a question of substance not
theretofore decided by the Supreme Court, or has decided it in
a manner probably not in accord with law or with the applicable
decisions of this Honorable Court;
2. That in setting aside and reversing the Summary Judgment
and, in lieu thereof, entering another remanding the case to the
court of origin for further proceedings, petitioner most
respectfully submits that the Court of Appeals committed a
serious reversible error in applying Section 1, Rule 19 (now
Section 1, Rule 34) of the Rules of Court providing for judgment
on the pleadings, instead of Rule 35 governing Summary
Judgments;
3. That in reversing and setting aside the Summary Judgment
and, in lieu thereof, entering another remanding the case to the
court of origin for further proceedings, petitioner most
respectfully submits that the Court of Appeals committed
grave abuse of discretion, disregarded judicial admissions,
made findings on ground of speculations, surmises, and
conjectures, or otherwise committed misapplications of the
laws and misapprehension of the facts.9 (Underscoring
supplied)
Essentially, the Court is tasked to resolve whether a marriage
may be declared void ab initio through a judgment on the
pleadings or a summary judgment and without the benefit of a
trial. But there are other procedural issues, including the
capacity of one who is not a spouse in bringing the action for
nullity of marriage.
Our Ruling
I. The grounds for declaration of absolute nullity of marriage
must be proved. Neither judgment on the pleadings nor
summary judgment is allowed. So is confession of judgment
disallowed.
Petitioner faults the CA in applying Section 1, Rule 1910 of the
Revised Rules of Court, which provides:
SECTION 1. Judgment on the pleadings. - Where an answer
fails to tender an issue, or otherwise admits the material
allegations of the adverse party's pleading, the court may, on
motion of that party, direct judgment on such pleading. But in
actions for annulment of marriage or for legal separation, the
material facts alleged in the complaint shall always be proved.
He argues that the CA should have applied Rule 35 of the Rules
of Court governing summary judgment, instead of the rule on
judgment on the pleadings.
Petitioner is misguided. The CA did not limit its finding solely
within the provisions of the Rule on judgment on the pleadings.
In disagreeing with the trial court, the CA likewise considered
the provisions on summary judgments, to wit:
Moreover, even if We are to sustain the applicability of the rules
on summary judgment to the case at bench, Our perusal of the
record shows that the finding of the court a quo for appellee
would still not be warranted. x x x11
But whether it is based on judgment on the pleadings or
summary judgment, the CA was correct in reversing the
summary judgment rendered by the trial court. Both the rules
on judgment on the pleadings and summary judgments have
no place in cases of declaration of absolute nullity of marriage
and even in annulment of marriage.
With the advent of A.M. No. 02-11-10-SC, known as "Rule on
Declaration of Absolute Nullity of Void Marriages and
Annulment of Voidable Marriages," the question on the
application of summary judgments or even judgment on the
pleadings in cases of nullity or annulment of marriage has been
stamped with clarity. The significant principle laid down by the
said Rule, which took effect on March 15, 200312 is found in
Section 17, viz.:
SEC. 17. Trial. - (1) The presiding judge shall personally conduct
the trial of the case. No delegation of evidence to a
commissioner shall be allowed except as to matters involving
property relations of the spouses.
(2) The grounds for declaration of absolute nullity or annulment
of marriage must be proved. No judgment on the pleadings,
summary judgment, or confession of judgment shall be
allowed.
Likewise instructive is the Court's pronouncement in Republic
v. Sandiganbayan.13 In that case, We excluded actions for
nullity or annulment of marriage from the application of
summary judgments.
Prescinding from the foregoing discussion, save for annulment
of marriage or declaration of its nullity or for legal separation,
summary judgment is applicable to all kinds of actions.
By issuing said summary judgment, the trial court has divested
the State of its lawful right and duty to intervene in the case.
The participation of the State is not terminated by the
declaration of the public prosecutor that no collusion exists
between the parties. The State should have been given the
opportunity to present controverting evidence before the
judgment was rendered.15
Both the Civil Code and the Family Code ordain that the court
should order the prosecuting attorney to appear and intervene
for the State. It is at this stage when the public prosecutor sees
to it that there is no suppression of evidence. Concomitantly,
even if there is no suppression of evidence, the public
prosecutor has to make sure that the evidence to be presented
or laid down before the court is not fabricated.
To further bolster its role towards the preservation of marriage,
the Rule on Declaration of Absolute Nullity of Void Marriages
reiterates the duty of the public prosecutor, viz.:
SEC. 13. Effect of failure to appear at the pre-trial. - (a) x x x
(b) x x x If there is no collusion, the court shall require the public
prosecutor to intervene for the State during the trial on the
merits to prevent suppression or fabrication of evidence.
Truly, only the active participation of the public prosecutor or
the Solicitor General will ensure that the interest of the State is
represented and protected in proceedings for declaration of
nullity of marriages by preventing the fabrication or
suppression of evidence.16
II. A petition for declaration of absolute nullity of void marriage
may be filed solely by the husband or wife. Exceptions: (1)
Nullity of marriage cases commenced before the effectivity of
A.M. No. 02-11-10-SC; and (2) Marriages celebrated during the
effectivity of the Civil Code.
Under the Rule on Declaration of Absolute Nullity of Void
Marriages and Annulment of Voidable Marriages, the petition
for declaration of absolute nullity of marriage may not be filed
by any party outside of the marriage. The Rule made it
exclusively a right of the spouses by stating:
SEC. 2. Petition for declaration of absolute nullity of void
marriages. -
(a) Who may file. - A petition for declaration of absolute nullity
of void marriage may be filed solely by the husband or the wife.
Section 2(a) of the Rule makes it the sole right of the husband
or the wife to file a petition for declaration of absolute nullity of
void marriage. The rationale of the Rule is enlightening, viz.:
Only an aggrieved or injured spouse may file a petition for
annulment of voidable marriages or declaration of absolute
nullity of void marriages. Such petition cannot be filed by
compulsory or intestate heirs of the spouses or by the State.
The Committee is of the belief that they do not have a legal
right to file the petition. Compulsory or intestate heirs have
only inchoate rights prior to the death of their predecessor,
and, hence, can only question the validity of the marriage of
the spouses upon the death of a spouse in a proceeding for the
settlement of the estate of the deceased spouse filed in the
regular courts. On the other hand, the concern of the State is to
preserve marriage and not to seek its dissolution.17
The new Rule recognizes that the husband and the wife are the
sole architects of a healthy, loving, peaceful marriage. They are
the only ones who can decide when and how to build the
foundations of marriage. The spouses alone are the engineers
of their marital life. They are simultaneously the directors and
actors of their matrimonial true-to-life play. Hence, they alone
can and should decide when to take a cut, but only in
accordance with the grounds allowed by law.
The innovation incorporated in A.M. No. 02-11-10-SC sets forth
a demarcation line between marriages covered by the Family
Code and those solemnized under the Civil Code. The Rule
extends only to marriages entered into during the effectivity of
the Family Code which took effect on August 3, 1988.
The advent of the Rule on Declaration of Absolute Nullity of
Void Marriages marks the beginning of the end of the right of
the heirs of the deceased spouse to bring a nullity of marriage
case against the surviving spouse. But the Rule never intended
to deprive the compulsory or intestate heirs of their
successional rights.
While A.M. No. 02-11-10-SC declares that a petition for
declaration of absolute nullity of marriage may be filed solely
by the husband or the wife, it does not mean that the
compulsory or intestate heirs are without any recourse under
the law. They can still protect their successional right, for, as
stated in the Rationale of the Rules on Annulment of Voidable
Marriages and Declaration of Absolute Nullity of Void
Marriages, compulsory or intestate heirs can still question the
validity of the marriage of the spouses, not in a proceeding for
declaration of nullity but upon the death of a spouse in a
proceeding for the settlement of the estate of the deceased
spouse filed in the regular courts.19
It is emphasized, however, that the Rule does not apply to
cases already commenced before March 15, 2003 although the
marriage involved is within the coverage of the Family Code.
This is so, as the new Rule which became effective on March 15,
200320 is prospective in its application. Thus, the Court held in
Enrico v. Heirs of Sps. Medinaceli,21 viz.:
As has been emphasized, A.M. No. 02-11-10-SC covers
marriages under the Family Code of the Philippines, and is
prospective in its application.22
Petitioner commenced the nullity of marriage case against
respondent Felicidad in 1995. The marriage in controversy was
celebrated on May 14, 1962. Which law would govern depends
upon when the marriage took place.23
The marriage having been solemnized prior to the effectivity of
the Family Code, the applicable law is the Civil Code which was
the law in effect at the time of its celebration.24 But the Civil
Code is silent as to who may bring an action to declare the
marriage void. Does this mean that any person can bring an
action for the declaration of nullity of marriage?
We respond in the negative. The absence of a provision in the
Civil Code cannot be construed as a license for any person to
institute a nullity of marriage case. Such person must appear to
be the party who stands to be benefited or injured by the
judgment in the suit, or the party entitled to the avails of the
suit.25 Elsewise stated, plaintiff must be the real party-in-
interest. For it is basic in procedural law that every action must
be prosecuted and defended in the name of the real party-in-
interest.26
Interest within the meaning of the rule means material interest
or an interest in issue to be affected by the decree or judgment
of the case, as distinguished from mere curiosity about the
question involved or a mere incidental interest. One having no
material interest to protect cannot invoke the jurisdiction of the
court as plaintiff in an action. When plaintiff is not the real
party-in-interest, the case is dismissible on the ground of lack
of cause of action.27
Illuminating on this point is Amor-Catalan v. Court of
Appeals,28 where the Court held:
True, under the New Civil Code which is the law in force at the
time the respondents were married, or even in the Family
Code, there is no specific provision as to who can file a petition
to declare the nullity of marriage; however, only a party who
can demonstrate "proper interest" can file the same. A petition
to declare the nullity of marriage, like any other actions, must
be prosecuted or defended in the name of the real party-in-
interest and must be based on a cause of action. Thus, in Niñal
v. Badayog, the Court held that the children have the
personality to file the petition to declare the nullity of marriage
of their deceased father to their stepmother as it affects their
successional rights.
In fine, petitioner's personality to file the petition to declare the
nullity of marriage cannot be ascertained because of the
absence of the divorce decree and the foreign law allowing it.
Hence, a remand of the case to the trial court for reception of
additional evidence is necessary to determine whether
respondent Orlando was granted a divorce decree and whether
the foreign law which granted the same allows or restricts
remarriage. If it is proved that a valid divorce decree was
obtained and the same did not allow respondent Orlando's
remarriage, then the trial court should declare respondent's
marriage as bigamous and void ab initio but reduced the
amount of moral damages from P300,000.00 to P50,000.00
and exemplary damages from P200,000.00 to P25,000.00. On
the contrary, if it is proved that a valid divorce decree was
obtained which allowed Orlando to remarry, then the trial court
must dismiss the instant petition to declare nullity of marriage
on the ground that petitioner Felicitas Amor-Catalan lacks legal
personality to file the same.29
III. The case must be remanded to determine whether or not
petitioner is a real-party-in-interest to seek the declaration of
nullity of the marriage in controversy.
In the case at bench, the records reveal that when Teofilo died
intestate in 1992, his only surviving compulsory heirs are
respondent Felicidad and their son, Teofilo II. Under the law on
succession, successional rights are transmitted from the
moment of death of the decedent and the compulsory heirs are
called to succeed by operation of law.30
Upon Teofilo's death in 1992, all his property, rights and
obligations to the extent of the value of the inheritance are
transmitted to his compulsory heirs. These heirs were
respondents Felicidad and Teofilo II, as the surviving spouse
and child, respectively.
Article 887 of the Civil Code outlined who are compulsory heirs,
to wit:
(1) Legitimate children and descendants, with respect to their
legitimate parents and ascendants;
(2) In default of the foregoing, legitimate parents and
ascendants, with respect to their legitimate children and
descendants;
(3) The widow or widower;
(4) Acknowledged natural children, and natural children by
legal fiction;
(5) Other illegitimate children referred to in Article 287 of the
Civil Code.31
Clearly, a brother is not among those considered as compulsory
heirs. But although a collateral relative, such as a brother, does
not fall within the ambit of a compulsory heir, he still has a right
to succeed to the estate. Articles 1001 and 1003 of the New Civil
Code provide:
ART. 1001. Should brothers and sisters or their children survive
with the widow or widower, the latter shall be entitled to one-
half of the inheritance and the brothers and sisters or their
children to the other half.
ART. 1003. If there are no descendants, ascendants, illegitimate
children, or a surviving spouse, the collateral relatives shall
succeed to the entire estate of the deceased in accordance with
the following articles.
Indeed, only the presence of descendants, ascendants or
illegitimate children excludes collateral relatives from
succeeding to the estate of the decedent. The presence of
legitimate, illegitimate, or adopted child or children of the
deceased precludes succession by collateral relatives.32
Conversely, if there are no descendants, ascendants,
illegitimate children, or a surviving spouse, the collateral
relatives shall succeed to the entire estate of the decedent.33
If respondent Teofilo II is declared and finally proven not to be
the legitimate, illegitimate, or adopted son of Teofilo,
petitioner would then have a personality to seek the nullity of
marriage of his deceased brother with respondent Felicidad.
This is so, considering that collateral relatives, like a brother
and sister, acquire successional right over the estate if the
decedent dies without issue and without ascendants in the
direct line.
The records reveal that Teofilo was predeceased by his parents.
He had no other siblings but petitioner. Thus, if Teofilo II is
finally found and proven to be not a legitimate, illegitimate, or
adopted son of Teofilo, petitioner succeeds to the other half of
the estate of his brother, the first half being allotted to the
widow pursuant to Article 1001 of the New Civil Code. This
makes petitioner a real-party-interest to seek the declaration of
absolute nullity of marriage of his deceased brother with
respondent Felicidad. If the subject marriage is found to be void
ab initio, petitioner succeeds to the entire estate.
It bears stressing, however, that the legal personality of
petitioner to bring the nullity of marriage case is contingent
upon the final declaration that Teofilo II is not a legitimate,
adopted, or illegitimate son of Teofilo.
If Teofilo II is proven to be a legitimate, illegitimate, or legally
adopted son of Teofilo, then petitioner has no legal personality
to ask for the nullity of marriage of his deceased brother and
respondent Felicidad. This is based on the ground that he has
no successional right to be protected, hence, does not have
proper interest. For although the marriage in controversy may
be found to be void from the beginning, still, petitioner would
not inherit. This is because the presence of descendant,
illegitimate,34 or even an adopted child35 excludes the
collateral relatives from inheriting from the decedent.
Thus, the Court finds that a remand of the case for trial on the
merits to determine the validity or nullity of the subject
marriage is called for. But the RTC is strictly instructed to
dismiss the nullity of marriage case for lack of cause of action if
it is proven by evidence that Teofilo II is a legitimate,
illegitimate, or legally adopted son of Teofilo Carlos, the
deceased brother of petitioner.
IV. Remand of the case regarding the question of filiation of
respondent Teofilo II is proper and in order. There is a need to
vacate the disposition of the trial court as to the other causes of
action before it.
Petitioner did not assign as error or interpose as issue the ruling
of the CA on the remand of the case concerning the filiation of
respondent Teofilo II. This notwithstanding, We should not
leave the matter hanging in limbo.
This Court has the authority to review matters not specifically
raised or assigned as error by the parties, if their consideration
is necessary in arriving at a just resolution of the case.36
We agree with the CA that without trial on the merits having
been conducted in the case, petitioner's bare allegation that
respondent Teofilo II was adopted from an indigent couple is
insufficient to support a total forfeiture of rights arising from
his putative filiation. However, We are not inclined to support
its pronouncement that the declaration of respondent Felicidad
as to the illegitimate filiation of respondent Teofilo II is more
credible. For the guidance of the appellate court, such
declaration of respondent Felicidad should not be afforded
credence. We remind the CA of the guaranty provided by
Article 167 of the Family Code to protect the status of
legitimacy of a child, to wit:
ARTICLE 167. The child shall be considered legitimate although
the mother may have declared against its legitimacy or may
have been sentenced as an adulteress.
It is stressed that Felicidad's declaration against the legitimate
status of Teofilo II is the very act that is proscribed by Article
167 of the Family Code. The language of the law is
unmistakable. An assertion by the mother against the
legitimacy of her child cannot affect the legitimacy of a child
born or conceived within a valid marriage.37

Finally, the disposition of the trial court in favor of petitioner for

causes of action concerning reconveyance, recovery of
property, and sum of money must be vacated. This has to be
so, as said disposition was made on the basis of its finding that
the marriage in controversy was null and void ab initio.

WHEREFORE, the appealed Decision is MODIFIED as follows:

1. The case is REMANDED to the Regional Trial Court in regard

to the action on the status and filiation of respondent Teofilo
Carlos II and the validity or nullity of marriage between
respondent Felicidad Sandoval and the late Teofilo Carlos;

2. If Teofilo Carlos II is proven to be the legitimate, or

illegitimate, or legally adopted son of the late Teofilo Carlos,
the RTC is strictly INSTRUCTED to DISMISS the action for
nullity of marriage for lack of cause of action;

3. The disposition of the RTC in Nos. 1 to 8 of the fallo of its

decision is VACATED AND SET ASIDE.

The Regional Trial Court is ORDERED to conduct trial on the

merits with dispatch and to give this case priority in its
calendar.

No costs.

SO ORDERED.

CHENG VS SY
NACHURA, J.:
This is a petition1 for review on certiorari under Rule 45 of the
Rules of Court of the Order dated January 2, 20062 of the
Regional Trial Court (RTC), Branch 18, Manila in Civil Case No.
05-112452 entitled Anita Cheng v. Spouses William Sy and
Tessie Sy.
The antecedents are as follows—
Petitioner Anita Cheng filed two (2) estafa cases before the
RTC, Branch 7, Manila against respondent spouses William and
Tessie Sy (Criminal Case No. 98-969952 against Tessie Sy and
Criminal Case No. 98-969953 against William Sy) for issuing to
her Philippine Bank of Commerce (PBC) Check Nos. 171762 and
71860 for ₱300,000.00 each, in payment of their loan, both of
which were dishonored upon presentment for having been
drawn against a closed account.
Meanwhile, based on the same facts, petitioner, on January 20,
1999, filed against respondents two (2) cases for violation of
Batas Pambansa Bilang (BP Blg.) 22 before the Metropolitan
Trial Court (MeTC), Branch 25, Manila (Criminal Case Nos.
341458-59).
On March 16, 2004, the RTC, Branch 7, Manila dismissed the
estafa cases for failure of the prosecution to prove the
elements of the crime. The Order dismissing Criminal Case No.
98-969952 contained no declaration as to the civil liability of
Tessie Sy.3 On the other hand, the Order in Criminal Case No.
98-969953 contained a statement, "Hence, if there is any
liability of the accused, the same is purely ‘civil,’ not criminal in
nature."4
Later, the MeTC, Branch 25, Manila, dismissed, on demurrer,
the BP Blg. 22 cases in its Order5 dated February 7, 2005 on
account of the failure of petitioner to identify the accused
respondents in open court. The Order also did not make any
pronouncement as to the civil liability of accused
respondents.1avvphi1
On April 26, 2005, petitioner lodged against respondents
before the RTC, Branch 18, Manila, a complaint6 for collection
of a sum of money with damages (Civil Case No. 05-112452)
based on the same loaned amount of ₱600,000.00 covered by
the two PBC checks previously subject of the estafa and BP Blg.
22 cases.
In the assailed Order7 dated January 2, 2006, the RTC, Branch
18, Manila, dismissed the complaint for lack of jurisdiction,
ratiocinating that the civil action to collect the amount of
₱600,000.00 with damages was already impliedly instituted in
the BP Blg. 22 cases in light of Section 1, paragraph (b) of Rule
111 of the Revised Rules of Court.
Petitioner filed a motion for reconsideration8 which the court
denied in its Order9 dated June 5, 2006. Hence, this petition,
raising the sole legal issue –
Whether or not Section 1 of Rule 111 of the 2000 Rules of
Criminal Procedure and Supreme Court Circular No. 57-97 on
the Rules and Guidelines in the filing and prosecution of
criminal cases under BP Blg. 22 are applicable to the present
case where the nature of the order dismissing the cases for
bouncing checks against the respondents was [based] on the
failure of the prosecution to identify both the accused
(respondents herein)?10
Essentially, petitioner argues that since the BP Blg. 22 cases
were filed on January 20, 1999, the 2000 Revised Rules on
Criminal Procedure promulgated on December 1, 2000 should
not apply, as it must be given only prospective application. She
further contends that that her case falls within the following
exceptions to the rule that the civil action correspondent to the
criminal action is deemed instituted with the latter—
(1) additional evidence as to the identities of the accused is
necessary for the resolution of the civil aspect of the case;
(2) a separate complaint would be just as efficacious as or even
more expedient than a timely remand to the trial court where
the criminal action was decided for further hearings on the civil
aspect of the case;
(3) the trial court failed to make any pronouncement as to the
civil liability of the accused amounting to a reservation of the
right to have the civil liability litigated in a separate action;
(4) the trial court did not declare that the facts from which the
civil liability might arise did not exist;
(5) the civil complaint is based on an obligation ex-contractu
and not ex-delicto pursuant to Article 3111 of the Civil Code;
and
(6) the claim for civil liability for damages may be had under
Article 2912 of the Civil Code.
Petitioner also points out that she was not assisted by any
private prosecutor in the BP Blg. 22 proceedings.
The rule is that upon the filing of the estafa and BP Blg. 22
cases against respondents, where the petitioner has not made
any waiver, express reservation to litigate separately, or has not
instituted the corresponding civil action to collect the amount
of ₱600,000.00 and damages prior to the criminal action, the
civil action is deemed instituted with the criminal cases.13
This rule applies especially with the advent of the 2000 Revised
Rules on Criminal Procedure. Thus, during the pendency of
both the estafa and the BP Blg. 22 cases, the action to recover
the civil liability was impliedly instituted and remained pending
before the respective trial courts. This is consonant with our
ruling in Rodriguez v. Ponferrada14 that the possible single civil
liability arising from the act of issuing a bouncing check can be
the subject of both civil actions deemed instituted with the
estafa case and the prosecution for violation of BP Blg. 22,
simultaneously available to the complaining party, without
traversing the prohibition against forum shopping.15 Prior to
the judgment in either the estafa case or the BP Blg. 22 case,
petitioner, as the complainant, cannot be deemed to have
elected either of the civil actions both impliedly instituted in
the said criminal proceedings to the exclusion of the other.16
The dismissal of the estafa cases for failure of the prosecution
to prove the elements of the crime beyond reasonable doubt—
where in Criminal Case No. 98-969952 there was no
pronouncement as regards the civil liability of the accused and
in Criminal Case No. 98-969953 where the trial court declared
that the liability of the accused was only civil in nature—
produced the legal effect of a reservation by the petitioner of
her right to litigate separately the civil action impliedly
instituted with the estafa cases, following Article 29 of the Civil
Code.17
However, although this civil action could have been litigated
separately on account of the dismissal of the estafa cases on
reasonable doubt, the petitioner was deemed to have also
elected that such civil action be prosecuted together with the
BP Blg. 22 cases in light of the Rodriguez v. Ponferrada ruling.
With the dismissal of the BP Blg. 22 cases for failure to
establish the identity of the accused, the question that arises is
whether such dismissal would have the same legal effect as the
dismissed estafa cases. Put differently, may petitioner’s action
to recover respondents’ civil liability be also allowed to prosper
separately after the BP Blg. 22 cases were dismissed?
Section 1 (b), Rule 111 of the 2000 Revised Rules on Criminal
Procedure states –
Section 1. Institution of criminal and civil actions. – (b) The
criminal action for violation of Batas Pambansa Blg. 22 shall be
deemed to include the corresponding civil action. No
reservation to file such civil action separately shall be allowed.
Upon filing of the joint criminal and civil actions, the offended
party shall pay in full the filing fees based on the amount of the
check involved, which shall be considered as the actual
damages claimed. Where the complaint or information also
seeks to recover liquidated, moral, nominal, temperate or
exemplary damages, the offended party shall pay the filing fees
based on the amounts alleged therein. If the amounts are not
so alleged but any of these damages [is] subsequently awarded
by the court, the filing fees based on the amount awarded shall
constitute a first lien on the judgment.
Where the civil action has been filed separately and trial thereof
has not yet commenced, it may be consolidated with the
criminal action upon application with the court trying the latter
case. If the application is granted, the trial of both actions shall
proceed in accordance with section 2 of this Rule governing
consolidation of the civil and criminal actions.
Petitioner is in error when she insists that the 2000 Rules on
Criminal Procedure should not apply because she filed her BP
Blg. 22 complaints in 1999. It is now settled that rules of
procedure apply even to cases already pending at the time of
their promulgation. The fact that procedural statutes may
somehow affect the litigants’ rights does not preclude their
retroactive application to pending actions. It is axiomatic that
the retroactive application of procedural laws does not violate
any right of a person who may feel that he is adversely
affected, nor is it constitutionally objectionable. The reason for
this is that, as a general rule, no vested right may attach to, nor
arise from, procedural laws.18
Indeed, under the present revised Rules, the criminal action for
violation of BP Blg. 22 includes the corresponding civil action to
recover the amount of the checks. It should be stressed, this
policy is intended to discourage the separate filing of the civil
action. In fact, the Rules even prohibits the reservation of a
separate civil action, i.e., one can no longer file a separate civil
case after the criminal complaint is filed in court. The only
instance when separate proceedings are allowed is when the
civil action is filed ahead of the criminal case. Even then, the
Rules encourages the consolidation of the civil and criminal
cases. Thus, where petitioner’s rights may be fully adjudicated
in the proceedings before the court trying the BP Blg. 22 cases,
resort to a separate action to recover civil liability is clearly
unwarranted on account of res judicata, for failure of petitioner
to appeal the civil aspect of the cases. In view of this special rule
governing actions for violation of BP Blg. 22, Article 31 of the
Civil Code is not applicable.19
Be it remembered that rules governing procedure before the
courts, while not cast in stone, are for the speedy, efficient, and
orderly dispensation of justice and should therefore be adhered
to in order to attain this objective.20
However, in applying the procedure discussed above, it appears
that petitioner would be left without a remedy to recover from
respondents the ₱600,000.00 allegedly loaned from her. This
could prejudice even the petitioner’s Notice of Claim involving
the same amount filed in Special Proceedings No. 98-88390
(Petition for Voluntary Insolvency by Kolin Enterprises, William
Sy and Tessie Sy), which case was reportedly archived for
failure to prosecute the petition for an unreasonable length of
time.21 Expectedly, respondents would raise the same defense
that petitioner had already elected to litigate the civil action to
recover the amount of the checks along with the BP Blg. 22
cases.
It is in this light that we find petitioner’s contention that she
was not assisted by a private prosecutor during the BP Blg. 22
proceedings critical. Petitioner indirectly protests that the
public prosecutor failed to protect and prosecute her cause
when he failed to have her establish the identities of the
accused during the trial and when he failed to appeal the civil
action deemed impliedly instituted with the BP Blg. 22 cases.
On this ground, we agree with petitioner.
Faced with the dismissal of the BP Blg. 22 cases, petitioner’s
recourse pursuant to the prevailing rules of procedure would
have been to appeal the civil action to recover the amount
loaned to respondents corresponding to the bounced checks.
Hence, the said civil action may proceed requiring only a
preponderance of evidence on the part of petitioner. Her failure
to appeal within the reglementary period was tantamount to a
waiver altogether of the remedy to recover the civil liability of
respondents. However, due to the gross mistake of the
prosecutor in the BP Blg. 22 cases, we are constrained to
digress from this rule.
It is true that clients are bound by the mistakes, negligence and
omission of their counsel.22 But this rule admits of exceptions –
(1) where the counsel’s mistake is so great and serious that the
client is prejudiced and denied his day in court, or (2) where the
counsel is guilty of gross negligence resulting in the client’s
deprivation of liberty or property without due process of law.23
Tested against these guidelines, we hold that petitioner’s lot
falls within the exceptions.
It is an oft-repeated exhortation to counsels to be well-
informed of existing laws and rules and to keep abreast with
legal developments, recent enactments and jurisprudence.
Unless they faithfully comply with such duty, they may not be
able to discharge competently and diligently their obligations
as members of the Bar.24 Further, lawyers in the government
service are expected to be more conscientious in the
performance of their duties as they are subject to public
scrutiny. They are not only members of the Bar but are also
public servants who owe utmost fidelity to public service.25
Apparently, the public prosecutor neglected to equip himself
with the knowledge of the proper procedure for BP Blg. 22
cases under the 2000 Rules on Criminal Procedure such that he
failed to appeal the civil action impliedly instituted with the BP
Blg. 22 cases, the only remaining remedy available to petitioner
to be able to recover the money she loaned to respondents,
upon the dismissal of the criminal cases on demurrer. By this
failure, petitioner was denied her day in court to prosecute the
respondents for their obligation to pay their loan.
Moreover, we take into consideration the trial court’s
observation when it dismissed the estafa charge in Criminal
Case No. 98-969953 that if there was any liability on the part of
respondents, it was civil in nature. Hence, if the loan be proven
true, the inability of petitioner to recover the loaned amount
would be tantamount to unjust enrichment of respondents, as
they may now conveniently evade payment of their obligation
merely on account of a technicality applied against petitioner.
There is unjust enrichment when (1) a person is unjustly
benefited, and (2) such benefit is derived at the expense of or
with damages to another. This doctrine simply means that a
person shall not be allowed to profit or enrich himself
inequitably at another’s expense. One condition for invoking
this principle of unjust enrichment is that the aggrieved party
has no other recourse based on contract, quasi-contract, crime,
quasi-delict or any other provision of law.26
Court litigations are primarily designed to search for the truth,
and a liberal interpretation and application of the rules which
will give the parties the fullest opportunity to adduce proof is
the best way to ferret out the truth. The dispensation of justice
and vindication of legitimate grievances should not be barred
by technicalities.27 For reasons of substantial justice and
equity, as the complement of the legal jurisdiction that seeks to
dispense justice where courts of law, through the inflexibility of
their rules and want of power to adapt their judgments to the
special circumstances of cases, are incompetent to do so,28 we
thus rule, pro hac vice, in favor of petitioner.

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

112452 entitled Anita Cheng v. Spouses William Sy and Tessie
Sy is hereby ordered REINSTATED. No pronouncement as to
costs.

SO ORDERED.

CAROLINO VS SENGA
PERALTA, J.:
Before us is a petition for review under Rule 45 seeking to
reverse and set aside the Decision1 dated May 25, 2009 of the
Court of Appeals (CA) in CA-G.R. SP No. 103502 and the
Resolution2 dated September 10, 2009 denying
reconsideration thereof.
The factual and legal antecedents are as follows:
On December 1, 1976, Jeremias A. Carolino, petitioner's
husband, retired3 from the Armed Forces of the Philippines
(AFP) with the rank of Colonel under General Order No. 1208
dated November 29, 1976, pursuant to the provisions of
Sections 1(A) and 10 of Republic Act (RA) No. 340,4 as
amended. He started receiving his monthly retirement pay in
the amount of P18,315.00 in December 1976 until the same was
withheld by respondents in March 2005. On June 3, 2005,
Jeremias wrote a letter5 addressed to the AFP Chief of Staff
asking for the reasons of the withholding of his retirement pay.
In a letter reply,6 Myrna F. Villaruz, LTC (FS) PA, Pension and
Gratuity Officer of the AFP Finance Center, informed Jeremias
that his loss of Filipino citizenship caused the deletion of his
name in the alpha list of the AFP Pensioners' Payroll effective
March 5, 2005; and that he could avail of re-entitlement to his
retirement benefits and the restoration of his name in the AFP
Pensioners' Masterlist Payroll by complying with the
requirements prescribed under RA No. 9225, or the Dual
Citizenship Act.
It appeared that the termination of Jeremias' pension was done
pursuant to Disposition Form7 dated October 29, 2004, which
was approved by the Chief of Staff and made effective in
January 2005. In the said Disposition Form, the AFP Judge
Advocate General opined that under the provisions of Sections
4, 5, and 6 of RA No. 340, retired military personnel are
disqualified from receiving pension benefits once incapable to
render military service as a result of his having sworn allegiance
to a foreign country. It was also mentioned that termination of
retirement benefits of pensioner of the AFP could be done
pursuant to the provisions of Presidential Decree (PD) No.
16388 which provides that the name of a retiree who loses his
Filipino citizenship shall be removed from the retired list and
his retirement benefits terminated upon such loss. It being in
consonance with the policy consideration that all retirement
laws inconsistent with the provisions of PD No. 1638 are
repealed and modified accordingly.
On August 24, 2006, Jeremias filed with the Regional Trial
Court (RTC) of Quezon City, a Petition for Mandamus9 against
Gen. Generoso Senga, as Chief of Staff of the AFP, Brig. Gen.
Fernando Zabat, as Chief of the AFP Finance Center, Comm.
Reynaldo Basilio, as Chief of the AFP-GHQ Management and
Fiscal Office, and Comm. Emilio Marayag, Pension and Gratuity
Management Officer, Pension and Gratuity Management
Center, AFP Finance Center, seeking reinstatement of his name
in the list of the AFP retired officers, resumption of payment of
his retirement benefits under RA No. 340, and the
reimbursement of all his retirement pay and benefits which
accrued from March 5, 2005 up to the time his name is
reinstated and, thereafter, with claim for damages and
attorney's fees. The case was docketed as Civil Case No. Q-06-
58686, and raffled off to Branch 220.
On February 26, 2007, the RTC rendered its Decision10
granting the petition for mandamus, the dispositive portion of
which reads:
WHEREFORE, judgment is hereby rendered ordering General
Hermogenes Esperon, Jr., as Chief of Staff of the AFP, Brigadier
General Fernando Zabat, as the Commanding Officer of the
AFP Finance Center, Commodore Reynaldo Basilio, as Chief of
the AFP-GFIQ Management and Fiscal Office, and Captain
Theresa M. Nicdao, as Pension and Gratuity Officer of the
Pension and Gratuity Management Center, or any of their
respective successors and those taking instructions from them
as agents or subordinates, to:
immediately reinstate the name of petitioner in the list of
retired AFP Officers, and to resume payment of his retirement
benefits under RA 340; and
release to [petitioner] all retirement benefits due him under RA
340 which accrued to him from March 2005 continuously up to
the time his name is reinstated in the list of AFP retired
officers.11
The RTC found that the issue for resolution is the applicability
of RA No. 340 and PD No. 1638 upon Jeremias' retirement
benefits. It found that he retired as a commissioned officer of
the AFP in 1976; thus, RANo. 340 is the law applicable in
determining his entitlement to his retirement benefits and not
PD No. 1638 which was issued only in 1979. Article 4 of the Civil
Code provides that "laws shall have no retroactive effect unless
the contrary is provided." PD No. 1638 does not provide for
such retroactive application. Also, it could not have been the
intendment of PD No. 1638 to deprive its loyal soldiers of a
monthly pension during their old age especially where, as here,
the right had been vested to them through time. RA No. 340
does not provide that the loss of Filipino citizenship would
terminate one's retirement benefits; and that PD No. 1638 does
not reduce whatever benefits that any person has already been
receiving under existing law.
Respondents sought reconsideration,12 but the RTC denied
the same in an Order13 dated May 25, 2007, the decretal
portion of which reads
WHEREFORE, premises considered, the instant Motion for
Reconsideration is hereby DENIED, considering that the
questioned decision has not yet attained.its finality. The
Motion for Execution in the meantime is hereby
DENIED.14cralawlawlibrary
Aggrieved, respondents elevated the case to the CA. After the
submission of the parties' respective memoranda, the case was
submitted for decision.
Jeremias died on September 30, 200715 and was substituted by
his wife, herein petitioner.
On May 25, 2009, the CA granted respondents' appeal. The
dispositive portion of the CA decision reads:
WHEREFORE, premises considered, the instant appeal is
GRANTED. The appealed decision is REVOKED and SET
ASIDE.16cralawlawlibrary
In so ruling, the CA found that while it is true that Jeremias
retired in 1976 under the provisions of RA No. 340, as amended,
which does not contain any provision anent cessation or loss of
retirement benefits upon acquiring another citizenship, PD No.
1638, which was signed in 1979, effectively repealed RA No.
340, as amended. Section 27 of PD No. 1638, which provides
that the name of a retiree who loses his Filipino citizenship shall
be removed from the retired list and his retirement benefits
terminated upon such loss, was correctly made applicable to
Jeremias' retirement benefits. Logic dictates that since
Jeremias had already renounced his allegiance to the
Philippines, he cannot now be compelled by the State to render
active service and to render compulsory military service when
the need arises. The CA found that for the writ of mandamus to
lie, it is essential that Jeremias should have a clear legal right to
the thing demanded and it must be the imperative duty of
respondents to perform the act required which petitioner failed
to show; thus, mandamus will not lie.
Petitioner's motion for reconsideration was denied in a
Resolution dated September 10, 2009.
Hence, this petition raising the following:
RESPONDENT COURT OF APPEALS COMMITTED GRAVE
REVERSIBLE ERROR IN RENDERING THE ASSAILED
DECISION AND RESOLUTION WHICH SET ASIDE AND
REVERSED THE 26 FEBRUARY 2007 DECISION OF THE QC
RTC BECAUSE:
PD 1638 should not have been applied and cannot be used
against petitioner as her husband's retirement and pension
were granted to him by the AFP under RA 340 which was not
superseded by PD 1638, a later statute.
Petitioner correctly availed of the remedy of mandamus to
compel the reinstatement of his pension and benefits from the
AFP under RA 340 as PD 1638 was not applicable to him.
Petitioner contends that her husband's retirement from the
active service in 1976 was pursuant to the provisions of RA No.
No. 340 as PD No. 1638 was not yet in existence then, and there
was nothing in RA No. 340 that disqualifies a retired military
personnel from receiving retirement benefits after acquiring
foreign citizenship. The concept of retirement benefits is such
that one is entitled to them for services already rendered and
not for those to be made at a future time. Retirement benefits
due petitioner's husband under RA No. 340, is an acquired right
which cannot be taken away by a subsequent law. PD No. 1638
does not expressly provide for its retroactive application.
Respondents, being officers of the AFP tasked to implement
the provisions of RA No. 340 have neglected their function
thereunder by delisting petitioner's husband as a retiree, thus,
mandamus is proper.
In his Comment, the Solicitor General argues that PD No. 1638
applies to all military personnel in the service of the AFP
whether active or retired; hence, it applies retroactively to
petitioner's husband. Even when a retiree is no longer in the
active service, his being a Filipino still makes him a part of the
Citizen Armed Forces; that whether a military personnel retires
under the provisions of RA No. 340 or under PD No. 1638, he is
still in the service of the military and/or the State only that he is
retired, thus, they should not be treated differently upon the
loss of Filipino citizenship. He argues when there is an
irreconcilable conflict between the two laws of different
vintages, i.e., RA No. 340 and PD No. 1638, the latter
enactment prevails.
The Solicitor General argues that mandamus will not issue to
enforce a right to compel compliance with a duty which is
questionable or over which a substantial doubt exists. In this
case, petitioner's husband does not have a well-defined, clear
and certain legal right to continuously receive retirement
benefits after becoming an American citizen. Likewise, the AFP
does not have a clear and imperative duty to grant the said
benefits considering that Section 27 of PD No. 1638 provides
that the name of a retiree who loses his Filipino citizenship shall
be removed from the retired list and his retirement benefits
terminated upon such loss.
Petitioner filed her reply thereto. We find merit in the petition.
Petitioner's husband retired in 1976 under RA No. 340. He was
already receiving his monthly retirement benefit in the amount
of P18,315.00 since December 1976 until it was terminated in
March 2005. Section 5, RA No. 340 provides:
Sec. 5. Officers and enlisted men placed in the retired list shall
be subject to the rules and articles of war and to trial by court-
martial for any breach thereof. At any time said officers and
enlisted men may be called to active service by the President.
Refusal on the part of any officer or enlisted man to perform
such services shall terminate his right to further participation in
the benefits of this Act provided he resides in the Philippines
and is physically fit for service. Such fitness for service shall be
determined by applicable regulations.
The afore-quoted provision clearly shows how a retiree's
retirement benefits may be terminated, i.e., when the retiree
refuses to perform active service when called to do so provided
that (1) the retiree resides in the Philippines and (2) is physically
fit for service. There is no other requirement found in the law
which would be the reason for the termination of a retiree's
retirement benefits. Petitioner's husband was never called to
perform active service and refused to do so, however, his
retirement benefit was terminated. The reason for such
termination was his loss of Filipino citizenship based on Section
27 of PD No. 1638, to wit:
Section 27. Military personnel retired under Sections 4, 5, 10, 11
and 12 shall be carried in the retired list of the Armed Forces of
the Philippines. The name of a retiree who loses his Filipino
citizenship shall be removed from the retired list and his
retirement benefits terminated upon such loss.
We find that the CA erred in applying PD No. 1638 to the
retirement benefits of petitioner's husband.
Firstly, PD No. 1638 was signed by then President Ferdinand
Marcos on September 10, 1979. Under Article 4 of the Civil
Code, it is provided that laws shall have no retroactive effect,
unless the contrary is provided. It is said that the law looks to
the future only and has no retroactive effect unless the
legislator may have formally given that effect to some legal
provisions;17 that all statutes are to be construed as having
only prospective operation, unless the purpose and intention of
the legislature to give them a retrospective effect is expressly
declared or is necessarily implied from the language used; and
that every case of doubt must be resolved against retrospective
effect.18 These principles also apply to amendments of
statutes.
PD No. 1638 does not contain any provision regarding its
retroactive application, nor the same may be implied from its
language. In fact, Section 36 of PD No. 1638 clearly provides
that the decree shall take effect upon its approval. As held in
Parreno v. COA,19 there is no question that PD No. 1638, as
amended, applies prospectively. Since PD No. 1638, as
amended, is about the new system of retirement and
separation from service of military personnel, it should apply to
those who were in the service at the time of its approval.20
Conversely, PD No. 1638 is not applicable to those who retired
before its effectivity in 1979. The rule is familiar that after an
act is amended, the original act continues to be in force with
regard to all rights that had accrued prior to such
amendment.21
Moreover, Section 27 of PD No. 1638 specifically provides for
the retirees to whom the law shall be applied, to wit:
Section 27. Military personnel retired under Sections 4, 5, 10, 11
and 12 shall be carried in the retired list of the Armed Forces of
the Philippines. The name of a retiree who loses his Filipino
citizenship shall be removed from the retired list and his
retirement benefits terminated upon such loss, (emphasis
supplied)
Notably, petitioner's husband did not retire under those above-
enumerated Sections of PD No. 1638 as he retired under RA
No. 340.
Secondly, it has been held that before a right to retirement
benefits or pension vests in an employee, he must have met the
stated conditions of eligibility with respect to the nature of
employment, age, and length of service.22 Undeniably,
petitioner's husband had complied with the conditions of
eligibility to retirement benefits as he was then receiving his
retirement benefits on a monthly basis until it was terminated.
Where the employee retires and meets the eligibility
requirements, he acquires a vested right to the benefits that is
protected by the due process clause.23 It is only upon
retirement that military personnel acquire a vested right to
retirement benefits.24 Retirees enjoy a protected property
interest whenever they acquire a right to immediate payment
under pre-existing law.25
In Ayog v. Cusi,26 we expounded the nature of a vested right,
thus:
"A right is vested when the right to enjoyment has become the
property of some particular person or persons as a present
interest" (16 C.J.S. 1173). It is "the privilege to enjoy property
legally vested, to enforce contracts, and enjoy the rights of
property conferred by the existing law" (12 C.J.S. 955, Note 46,
No. 6) or "some right or interest in property which has become
fixed and established and is no longer open to doubt or
controversy" (Downs vs. Blount 170 Fed. 15, 20, cited in Balboa
vs. Farrales, 51 Phil. 498, 502).
The due process clause prohibits the annihilation of vested
rights. "A state may not impair vested rights by legislative
enactment, by the enactment or by the subsequent repeal of a
municipal ordinance, or by a change in the constitution of the
State, except in a legitimate exercise of the police power" (16
C.J.S. 1177-78).
It has been observed that, generally, the term "vested right"
expresses the concept of present fixed interest, which in right
reason and natural justice should be protected against arbitrary
State action, or an innately just and imperative right which an
enlightened free society, sensitive to inherent and irrefragable
individual rights, cannot deny (16 C.J.S. 1174, Note 71, No. 5,
citing Pennsylvania Greyhound Lines, Inc. vs. Rosenthal, 192
Atl. 2nd 587).27cralawlawlibrary
Petitioner's husband acquired vested right to the payment of
his retirement benefits which must be respected and cannot be
affected by the subsequent enactment of PD No. 1638 which
provides that loss of Filipino citizenship terminates retirement
benefits. Vested rights include not only legal or equitable title
to the enforcement of a demand, but also an exemption from
new obligations after the right has vested.28
In fact, Sections 33 and 35 of PD No. 1638 recognize such
vested right, to wit:
Section 33. Nothing in this Decree shall be construed in any
manner to reduce whatever retirement and separation pay or
gratuity or other monetary benefits which any person is
heretofore receiving or is entitled to receive under the
provisions of existing law.
Section. 35. Except those necessary to give effect to the
provisions of this Decree and to preserve the rights granted to
retired or separated military personnel, all laws, rules and
regulations inconsistent with the provisions of this Decree are benefits, which has become vested, and being a ministerial
hereby repealed or modified accordingly. duty on the part of the respondents to pay such claim,
mandamus is the proper remedy to compel such payment.
Section 33 of PD No. 1638 is clear that the law has no intention
to reduce or to revoke whatever retirement benefits being The doctrine of exhaustion of administrative remedies calls for
enjoyed by a retiree at the time of its passage. Hence, Section resort first to the appropriate administrative authorities in the
35 provides for an exception to what the decree repealed or resolution of a controversy falling under their jurisdiction
modified, i.e., except those necessary to preserve the rights before the same may be elevated to the courts of justice for
granted to retired or separated military personnel. review.34 However, the principle of exhaustion of
administrative remedies need not be adhered to when the
We also find that the CA erred in finding that mandamus will question is purely legal.35 This is because issues of law cannot
not lie. be resolved with finality by the administrative officer.36 Appeal
to the administrative officer would only be an exercise in
Section 3, Rule 65 of the Rules of Court lay down under what
futility.37 Here, the question raised is purely legal, i.e., what law
circumstances petition for mandamus may be filed, to wit:
should be applied in the payment of retirement benefits of
petitioner's husband. Thus, there was no need to exhaust all
SEC. 3. Petition for mandamus. - When any tribunal,
administrative remedies before a judicial relief can be sought.
corporation, board, officer or person unlawfully neglects the
performance of an act which the law specifically enjoins as a
WHEREFORE, the petition is GRANTED. The Decision dated
duty resulting from an office, trust, or station, or unlawfully
May 25, 2009 and the Resolution dated September 10, 2009 of
excludes another from the use and enjoyment of a right or
the Court of Appeals are hereby REVERSED and SET ASIDE.
office to which such other is entitled, and there is no other
The Decision dated February 26, 2007 of the Regional Trial
plain, speedy and adequate remedy in the ordinary course of
Court of Quezon City, Branch 220, is AFFIRMED.
law, the person aggrieved thereby may file a verified petition in
the proper court, alleging the facts with certainty and praying SO ORDERED.
that judgment be rendered commanding the respondent,
immediately or at some other time to be specified by the court,
to do the act required to be done to protect the rights of the
petitioner, and to pay the damages sustained by the petitioner
by reason of the wrongful acts of the respondent.
A writ of mandamus can be issued only when petitioner's legal
right to the performance of a particular act which is sought to
be compelled is clear and complete. A clear legal right is a right
which is indubitably granted by law or is inferable as a matter of
law.29 A doctrine well-embedded in our jurisprudence is that
mandamus will issue only when the petitioner has a clear legal
right to the performance of the act sought to be compelled and
the respondent has an imperative duty to perform the same.30
The remedy of mandamus lies to compel the performance of a
ministerial duty.31 A purely ministerial act or duty is one that
an officer or tribunal performs in a given state of facts, in a
prescribed manner, in obedience to the mandate of a legal
authority, without regard to or the exercise of its own
judgment upon the propriety or impropriety of the act done.32
If the law imposes a duty upon a public officer, and gives him
the right to decide how or when the duty shall be performed,
such duty is discretionary and not ministerial.33
The petition for mandamus filed by petitioner's husband with
the RTC was for the payment of his terminated retirement
 WAIVER OF RIGHTS
FAMANILA VS CA
YNARES-SANTIAGO, J.:
Before us is a petition for review on certiorari assailing the
Decision 1 of the Court of Appeals in CA-G.R. SP No. 50615
dated March 30, 2001 which affirmed the Decision 2 of the
National Labor Relations Commission (NLRC) dated March 31,
1998 dismissing petitioner’s complaint for payment of disability
and other benefits for lack of merit and the Resolution 3 dated
October 5, 2001 of the Court of Appeals denying petitioner’s
motion for reconsideration.
The antecedent facts are as follows:
In 1989, respondent NFD International Manning Agents, Inc.
hired the services of petitioner Roberto G. Famanila as
Messman 4 for Hansa Riga, a vessel registered and owned by its
principal and co-respondent, Barbership Management Limited.
On June 21, 1990, while Hansa Riga was docked at the port of
Eureka, California, U.S.A. and while petitioner was assisting in
the loading operations, the latter complained of a headache.
Petitioner experienced dizziness and he subsequently
collapsed. Upon examination, it was determined that he had a
sudden attack of left cerebral hemorrhage from a ruptured
cerebral aneurysm. 5 Petitioner underwent a brain operation
and he was confined at the Emmanuel Hospital in Portland,
Oregon, U.S.A. On July 19, 1990, he underwent a second brain
operation.
Owing to petitioner’s physical and mental condition, he was
repatriated to the Philippines. On August 21, 1990, he was
examined at the American Hospital in Intramuros, Manila
where the examining physician, Dr. Patricia Abesamis declared
that he "cannot go back to sea duty and has been observed for
120 days, he is being declared permanently, totally disabled." 6
Thereafter, authorized representatives of the respondents
convinced him to settle his claim amicably by accepting the
amount of US$13,200. 7 Petitioner accepted the offer as
evidenced by his signature in the Receipt and Release dated
February 28, 1991. 8 His wife, Gloria Famanila and one Richard
Famanila, acted as witnesses in the signing of the release.
On June 11, 1997, petitioner filed a complaint 9 with the NLRC
which was docketed as NLRC OCW Case No. 6-838-97-L
praying for an award of disability benefits, share in the
insurance proceeds, moral damages and attorney’s fees. On
September 29, 1997, Acting Executive Labor Arbiter Voltaire A.
Balitaan dismissed the complaint on the ground of prescription.
Petitioner appealed the decision with the NLRC. On March 31,
1998, the NLRC promulgated its decision 10 finding the appeal
to be without merit and ordered its dismissal. When the motion
for reconsideration 11 was denied by the NLRC in its resolution
dated June 29, 1998, 12 petitioner filed a petition for certiorari
with this Court. On December 2, 1998, we resolved to refer the
case to the Court of Appeals pursuant to our ruling in St. Martin
Funeral Home v. National Labor Relations Commission. 13
On March 30, 2001, the Court of Appeals promulgated the
assailed decision which dismissed the petition for lack of merit.
Petitioner’s motion for reconsideration was denied, hence, the
present petition for review raising the following issues:
I. THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION IN UPHOLDING THE VALIDITY OF THE
RECEIPT AND RELEASE SINCE PETITIONER’S CONSENT
THERETO WAS VITIATED THEREBY MAKING THE SAME VOID
AND UNENFORCEABLE.
II. THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION IN HOLDING THAT THE PRESCRIPTION
PERIOD APPLICABLE TO THE CLAIM OF THE PETITIONER IS
THE 3-YEAR PERIOD PROVIDED FOR UNDER THE LABOR
CODE OF THE PHILIPPINES AND NOT THE 10-YEAR PERIOD
PROVIDED FOR UNDER THE CIVIL CODE.
Petitioner claims that he did not sign the Receipt and Release
voluntarily or freely because he was permanently disabled and
in financial constraints. These factors allegedly vitiated his
consent which makes the Receipt and Release void and
unenforceable.
The petition lacks merit.
It is fundamental that the scope of the Supreme Court’s judicial
review under Rule 45 of the Rules of Court is confined only to
errors of law. It does not extend to questions of fact. More so in
labor cases where the doctrine applies with greater force. 14
The Labor Arbiter and the NLRC have already determined the
factual issues, and these were affirmed by the Court of Appeals.
Thus, they are accorded not only great respect but also finality
and are deemed binding upon this Court so long as they are
supported by substantial evidence. 15 We reviewed the records
of the case and we find no reason to deviate from the findings
of the labor arbiter, NLRC and the Court of Appeals.
A vitiated consent does not make a contract void and
unenforceable. A vitiated consent only gives rise to a voidable
agreement. Under the Civil Code, the vices of consent are
mistake, violence, intimidation, undue influence or fraud. 16 If
consent is given through any of the aforementioned vices of
consent, the contract is voidable. 17 A voidable contract is
binding unless annulled by a proper action in court. 18
Petitioner contends that his permanent and total disability
vitiated his consent to the Receipt and Release thereby
rendering it void and unenforceable. However, disability is not
among the factors that may vitiate consent. Besides, save for
petitioner’s self-serving allegations, there is no proof on record
that his consent was vitiated on account of his disability. In the
absence of such proof of vitiated consent, the validity of the
Receipt and Release must be upheld. We agree with the
findings of the Court of Appeals that:
In the case at bar, there is nothing in the records to show that
petitioner’s consent was vitiated when he signed the
agreement. Granting that petitioner has not fully recovered his
health at the time he signed the subject document, the same
cannot still lead to the conclusion that he did not voluntar[il]y
accept the agreement, for his wife and another relative
witnessed his signing.
Moreover, the document entitled receipt and release which
was attached by petitioner in his appeal does not show on its
face any violation of law or public policy. In fact, petitioner did
not present any proof to show that the consideration for the
same is not reasonable and acceptable. Absent any evidence to
support the same, the Court cannot, on its own accord, decide
against the unreasonableness of the consideration. 19
It is true that quitclaims and waivers are oftentimes frowned
upon and are considered as ineffective in barring recovery for
the full measure of the worker’s right and that acceptance of
the benefits therefrom does not amount to estoppel. 20 The
reason is plain. Employer and employee, obviously do not stand
on the same footing. 21 However, not all waivers and
quitclaims are invalid as against public policy. If the agreement
was voluntarily entered into and represents a reasonable
settlement, it is binding on the parties and may not later be
disowned simply because of change of mind. It is only where
there is clear proof that the waiver was wangled from an
unsuspecting or gullible person, or the terms of the settlement
are unconscionable on its face, that the law will step in to annul
the questionable transaction. But where it is shown that the
person making the waiver did so voluntarily, with full
understanding of what he was doing, and the consideration for
the quitclaim is credible and reasonable, the transaction must
be recognized as a valid and binding undertaking, 22 as in this
case.
To be valid and effective, waivers must be couched in clear and
unequivocal terms, leaving no doubt as to the intention of
those giving up a right or a benefit that legally pertains to
them. 23 We have reviewed the terms and conditions
contained in the Receipt and Release and we find the same to
be clear and unambiguous. The signing was even witnessed by
petitioner’s wife, Gloria T. Famanila and one Richard T.
Famanila. The Receipt and Release provides in part:
That for and in consideration of the sum of THIRTEEN
THOUSAND TWO HUNDRED DOLLARS (US$13,200.00) or its
equivalent in Philippine currency THREE HUNDRED SIXTY FIVE
THOUSAND NINE HUNDRED FOUR PESOS (365,904.00), the
receipt of which is hereby acknowledged to my full and
complete satisfaction x x x I, ROBERTO G. FAMANILA, x x x
hereby remise, release and forever discharge said vessel
"HANSA RIGA", her Owners, operators, managers, charterers,
agents, underwriters, P and I Club, master, officers, and crew
and all parties at interest therein or thereon, whether named or
not named, including but not limited to BARBER SHIP
MANAGEMENT LIMITED, NFD INTERNATIONAL MANNING
AGENTS, INC. and ASSURANCEFORENIGEN GARD from any
and all claims, demands, debts, dues, liens, actions or causes of
action, at law or in equity, in common law or in admiralty,
statutory or contractual, arising from and under the laws of the
United States of America, Norway, Hongkong or the Republic
of the Philippines and/or any other foreign country now held,
owned or possessed by me or by any person or persons, arising
from or related to or concerning whether directly or indirectly,
proximately or remotely, without being limited to but including
the said illness suffered by me on board the vessel "HANSA
RIGA" on or about 21st June 1990 at Portland, Oregon and
disability compensation in connection therewith.
This instrument is a GENERAL RELEASE intended to release all
liabilities of any character and/or claims or damages and/or
losses and/or any other liabilities whatsoever, whether
contractual or statutory, at common law or in equity, tortious
or in admiralty, now or henceforth in any way related to or
occurring as a consequence of the illness suffered by me as
Messman of the vessel "HANSA RIGA", including but not
limited to all damages and/or losses consisting of loss of
support, loss of earning capacity, loss of all benefits of
whatsoever nature and extent incurred, physical pain and
suffering and/or all damages and/or indemnities claimable in
law, tort, contract, common law, equity and/or admiralty by me
or by any person or persons pursuant to the laws of the United SO ORDERED.
States of America, Norway, Hongkong or the Republic of the
Philippines and of all other countries whatsoever.
I hereby certify that I am of legal age and that I fully understand
this instrument which was read to me in the local dialect and I
agree that this is a FULL AND FINAL RELEASE AND
DISCHARGE of all parties and things referred to herein, and I
further agree that this release may be pleaded as an absolute
and final bar to any suit or suits or legal proceedings that may
hereafter be prosecuted by me or by any one claiming by,
through, or under me, against any of the persons or things
referred to or related herein, for any matter or thing referred to
or related herein. 24
It is elementary that a contract is perfected by mere consent
and from that moment the parties are bound not only to the
fulfillment of what has been expressly stipulated but also to all
the consequences which, according to their nature, may be in
keeping with good faith, usage and law. 25 Further, dire
necessity is not an acceptable ground for annulling the Receipt
and Release since it has not been shown that petitioner was
forced to sign it. 26
Regarding prescription, the applicable prescriptive period for
the money claims against the respondents is the three year
period pursuant to Article 291 of the Labor Code which
provides that:
ART. 291. Money Claims. – All money claims arising from
employer-employee relations accruing during the effectivity of
this Code shall be filed within three (3) years from the time the
cause of action accrued; otherwise they shall be forever barred.
Since petitioner’s demand for an award of disability benefits is
a money claim arising from his employment, Article 291 of the
Labor Code applies. From the time petitioner was declared
permanently and totally disabled on August 21, 1990 which
gave rise to his entitlement to disability benefits up to the time
that he filed the complaint on June 11, 1997, more than three
years have elapsed thereby effectively barring his claim.
WHEREFORE, the petition is DENIED. The Decision of the
Court of Appeals dated March 30, 2001 in CA-G.R. SP No. 50615
which affirmed the Decision of the National Labor Relations
Commission dismissing petitioner’s complaint for disability and
other benefits for lack of merit, and
the Resolution dated October 5, 2001 denying the motion for
reconsideration, are AFFIRMED. GUY VS CA
YNARES-SANTIAGO, J.:
This petition for review on certiorari assails the January 22,
2004 Decision1 of the Court of Appeals in CA-G.R. SP No.
79742, which affirmed the Orders dated July 21, 20002 and July
17, 20033 of the Regional Trial Court of Makati City, Branch 138
in SP Proc. Case No. 4549 denying petitioner's motion to
dismiss; and its May 25, 2004 Resolution4 denying petitioner's
motion for reconsideration.
The facts are as follows:
On June 13, 1997, private respondent-minors Karen Oanes Wei
and Kamille Oanes Wei, represented by their mother Remedios
Oanes (Remedios), filed a petition for letters of administration5
before the Regional Trial Court of Makati City, Branch 138. The
case was docketed as Sp. Proc. No. 4549 and entitled Intestate
Estate of Sima Wei (a.k.a. Rufino Guy Susim).
Private respondents alleged that they are the duly
acknowledged illegitimate children of Sima Wei, who died
intestate in Makati City on October 29, 1992, leaving an estate
valued at P10,000,000.00 consisting of real and personal
properties. His known heirs are his surviving spouse Shirley Guy
and children, Emy, Jeanne, Cristina, George and Michael, all
surnamed Guy. Private respondents prayed for the
appointment of a regular administrator for the orderly
settlement of Sima Wei's estate. They likewise prayed that, in
the meantime, petitioner Michael C. Guy, son of the decedent,
be appointed as Special Administrator of the estate. Attached
to private respondents' petition was a Certification Against
Forum Shopping6 signed by their counsel, Atty. Sedfrey A.
Ordoñez.
In his Comment/Opposition,7 petitioner prayed for the
dismissal of the petition. He asserted that his deceased father
left no debts and that his estate can be settled without securing
letters of administration pursuant to Section 1, Rule 74 of the
Rules of Court. He further argued that private respondents
should have established their status as illegitimate children
during the lifetime of Sima Wei pursuant to Article 175 of the
Family Code.
The other heirs of Sima Wei filed a Joint Motion to Dismiss8 on
the ground that the certification against forum shopping
should have been signed by private respondents and not their
counsel. They contended that Remedios should have executed
the certification on behalf of her minor daughters as mandated
by Section 5, Rule 7 of the Rules of Court.
In a Manifestation/Motion as Supplement to the Joint Motion
to Dismiss,9 petitioner and his co-heirs alleged that private
respondents' claim had been paid, waived, abandoned or
otherwise extinguished by reason of Remedios' June 7, 1993
Release and Waiver of Claim stating that in exchange for the
financial and educational assistance received from petitioner,
Remedios and her minor children discharge the estate of Sima
Wei from any and all liabilities.
The Regional Trial Court denied the Joint Motion to Dismiss as
well as the Supplemental Motion to Dismiss. It ruled that while
the Release and Waiver of Claim was signed by Remedios, it
had not been established that she was the duly constituted
guardian of her minor daughters. Thus, no renunciation of right
occurred. Applying a liberal application of the rules, the trial
court also rejected petitioner's objections on the certification
against forum shopping.
Petitioner moved for reconsideration but was denied. He filed a
petition for certiorari before the Court of Appeals which
affirmed the orders of the Regional Trial Court in its assailed
Decision dated January 22, 2004, the dispositive portion of
which states:
WHEREFORE, premises considered, the present petition is
hereby DENIED DUE COURSE and accordingly DISMISSED, for
lack of merit. Consequently, the assailed Orders dated July 21,
2000 and July 17, 2003 are hereby both AFFIRMED. Respondent
Judge is hereby DIRECTED to resolve the controversy over the
illegitimate filiation of the private respondents (sic) minors [-]
Karen Oanes Wei and Kamille Oanes Wei who are claiming
successional rights in the intestate estate of the deceased Sima
Wei, a.k.a. Rufino Guy Susim.
SO ORDERED.10
The Court of Appeals denied petitioner's motion for
reconsideration, hence, this petition.
Petitioner argues that the Court of Appeals disregarded
existing rules on certification against forum shopping; that the
Release and Waiver of Claim executed by Remedios released
and discharged the Guy family and the estate of Sima Wei from
any claims or liabilities; and that private respondents do not
have the legal personality to institute the petition for letters of
administration as they failed to prove their filiation during the
lifetime of Sima Wei in accordance with Article 175 of the
Family Code.
Private respondents contend that their counsel's certification
can be considered substantial compliance with the rules on
certification of non-forum shopping, and that the petition
raises no new issues to warrant the reversal of the decisions of
the Regional Trial Court and the Court of Appeals.
The issues for resolution are: 1) whether private respondents'
petition should be dismissed for failure to comply with the rules
on certification of non-forum shopping; 2) whether the Release
and Waiver of Claim precludes private respondents from
claiming their successional rights; and 3) whether private
respondents are barred by prescription from proving their
filiation.
The petition lacks merit.
Rule 7, Section 5 of the Rules of Court provides that the
certification of non-forum shopping should be executed by the
plaintiff or the principal party. Failure to comply with the
requirement shall be cause for dismissal of the case. However,
a liberal application of the rules is proper where the higher
interest of justice would be served. In Sy Chin v. Court of
Appeals,11 we ruled that while a petition may have been flawed
where the certificate of non-forum shopping was signed only
by counsel and not by the party, this procedural lapse may be
overlooked in the interest of substantial justice.12 So it is in the
present controversy where the merits13 of the case and the
absence of an intention to violate the rules with impunity
should be considered as compelling reasons to temper the
strict application of the rules.
As regards Remedios' Release and Waiver of Claim, the same
does not bar private respondents from claiming successional
rights. To be valid and effective, a waiver must be couched in
clear and unequivocal terms which leave no doubt as to the
intention of a party to give up a right or benefit which legally
pertains to him. A waiver may not be attributed to a person
when its terms do not explicitly and clearly evince an intent to
abandon a right.14
In this case, we find that there was no waiver of hereditary
rights. The Release and Waiver of Claim does not state with
clarity the purpose of its execution. It merely states that
Remedios received P300,000.00 and an educational plan for her
minor daughters "by way of financial assistance and in full
settlement of any and all claims of whatsoever nature and kind
x x x against the estate of the late Rufino Guy Susim."15
Considering that the document did not specifically mention
private respondents' hereditary share in the estate of Sima Wei,
it cannot be construed as a waiver of successional rights.
Moreover, even assuming that Remedios truly waived the
hereditary rights of private respondents, such waiver will not
bar the latter's claim. Article 1044 of the Civil Code, provides:
ART. 1044. Any person having the free disposal of his property
may accept or repudiate an inheritance.
Any inheritance left to minors or incapacitated persons may be
accepted by their parents or guardians. Parents or guardians
may repudiate the inheritance left to their wards only by
judicial authorization.
The right to accept an inheritance left to the poor shall belong
to the persons designated by the testator to determine the
beneficiaries and distribute the property, or in their default, to
those mentioned in Article 1030. (Emphasis supplied)
Parents and guardians may not therefore repudiate the
inheritance of their wards without judicial approval. This is
because repudiation amounts to an alienation of property16
which must pass the court's scrutiny in order to protect the
interest of the ward. Not having been judicially authorized, the
Release and Waiver of Claim in the instant case is void and will
not bar private respondents from asserting their rights as heirs
of the deceased.
Furthermore, it must be emphasized that waiver is the
intentional relinquishment of a known right. Where one lacks
knowledge of a right, there is no basis upon which waiver of it
can rest. Ignorance of a material fact negates waiver, and
waiver cannot be established by a consent given under a
mistake or misapprehension of fact.17
In the present case, private respondents could not have
possibly waived their successional rights because they are yet
to prove their status as acknowledged illegitimate children of
the deceased. Petitioner himself has consistently denied that
private respondents are his co-heirs. It would thus be
inconsistent to rule that they waived their hereditary rights
when petitioner claims that they do not have such right. Hence,
petitioner's invocation of waiver on the part of private
respondents must fail.
Anent the issue on private respondents' filiation, we agree with
the Court of Appeals that a ruling on the same would be
premature considering that private respondents have yet to
present evidence. Before the Family Code took effect, the
governing law on actions for recognition of illegitimate children
was Article 285 of the Civil Code, to wit:
ART. 285. The action for the recognition of natural children
may be brought only during the lifetime of the presumed
parents, except in the following cases:
(1) If the father or mother died during the minority of the child,
in which case the latter may file the action before the
expiration of four years from the attainment of his majority;
(2) If after the death of the father or of the mother a document
should appear of which nothing had been heard and in which
either or both parents recognize the child.
In this case, the action must be commenced within four years
from the finding of the document. (Emphasis supplied)
We ruled in Bernabe v. Alejo18 that illegitimate children who
were still minors at the time the Family Code took effect and
whose putative parent died during their minority are given the
right to seek recognition for a period of up to four years from
attaining majority age. This vested right was not impaired or
taken away by the passage of the Family Code.19
On the other hand, Articles 172, 173 and 175 of the Family Code,
which superseded Article 285 of the Civil Code, provide:
ART. 172. The filiation of legitimate children is established by
any of the following:
(1) The record of birth appearing in the civil register or a final
judgment; or
(2) An admission of legitimate filiation in a public document or
a private handwritten instrument and signed by the parent
concerned.
In the absence of the foregoing evidence, the legitimate
filiation shall be proved by:
(1) The open and continuous possession of the status of a
legitimate child; or
(2) Any other means allowed by the Rules of Court and special
laws.
ART. 173. The action to claim legitimacy may be brought by the
child during his or her lifetime and shall be transmitted to the
heirs should the child die during minority or in a state of
insanity. In these cases, the heirs shall have a period of five
years within which to institute the action.
The action already commenced by the child shall survive
notwithstanding the death of either or both of the parties.
ART. 175. Illegitimate children may establish their illegitimate
filiation in the same way and on the same, evidence as
legitimate children.
The action must be brought within the same period specified in
Article 173, except when the action is based on the second
paragraph of Article 172, in which case the action may be
brought during the lifetime of the alleged parent.
Under the Family Code, when filiation of an illegitimate child is
established by a record of birth appearing in the civil register or
a final judgment, or an admission of filiation in a public
document or a private handwritten instrument signed by the
parent concerned, the action for recognition may be brought
by the child during his or her lifetime. However, if the action is
based upon open and continuous possession of the status of an
illegitimate child, or any other means allowed by the rules or
special laws, it may only be brought during the lifetime of the
alleged parent.
It is clear therefore that the resolution of the issue of
prescription depends on the type of evidence to be adduced by
private respondents in proving their filiation. However, it would
be impossible to determine the same in this case as there has
been no reception of evidence yet. This Court is not a trier of
facts. Such matters may be resolved only by the Regional Trial
Court after a full-blown trial.
While the original action filed by private respondents was a
petition for letters of administration, the trial court is not
precluded from receiving evidence on private respondents'
filiation. Its jurisdiction extends to matters incidental and
collateral to the exercise of its recognized powers in handling
the settlement of the estate, including the determination of the
status of each heir.20 That the two causes of action, one to
compel recognition and the other to claim inheritance, may be
joined in one complaint is not new in our jurisprudence.21 As
held in Briz v. Briz:22
The question whether a person in the position of the present
plaintiff can in any event maintain a complex action to compel
recognition as a natural child and at the same time to obtain
ulterior relief in the character of heir, is one which in the
opinion of this court must be answered in the affirmative,
provided always that the conditions justifying the joinder of the
two distinct causes of action are present in the particular case.
In other words, there is no absolute necessity requiring that the
action to compel acknowledgment should have been instituted
and prosecuted to a successful conclusion prior to the action in
which that same plaintiff seeks additional relief in the character
of heir. Certainly, there is nothing so peculiar to the action to
compel acknowledgment as to require that a rule should be
here applied different from that generally applicable in other
cases. x x x
The conclusion above stated, though not heretofore explicitly
formulated by this court, is undoubtedly to some extent
supported by our prior decisions. Thus, we have held in
numerous cases, and the doctrine must be considered well
settled, that a natural child having a right to compel
acknowledgment, but who has not been in fact acknowledged,
may maintain partition proceedings for the division of the
inheritance against his coheirs (Siguiong vs. Siguiong, 8 Phil., 5;
Tiamson vs. Tiamson, 32 Phil., 62); and the same person may
intervene in proceedings for the distribution of the estate of his
deceased natural father, or mother (Capistrano vs. Fabella, 8
Phil., 135; Conde vs. Abaya, 13 Phil., 249; Ramirez vs. Gmur, 42
Phil., 855). In neither of these situations has it been thought
necessary for the plaintiff to show a prior decree compelling
acknowledgment. The obvious reason is that in partition suits
and distribution proceedings the other persons who might take
by inheritance are before the court; and the declaration of
heirship is appropriate to such proceedings.

WHEREFORE, the instant petition is DENIED. The Decision

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

SO ORDERED.

OTAMIAS VS REPUBLIC

LEONEN, J.:

A writ of execution lies against the pension benefits of a retired

officer of the Armed Forces of the Philippines, which is the
subject of a deed of assignment drawn by him granting support
to his wife and five (5) children. The benefit of exemption from
execution of pension benefits is a statutory right that may be
waived, especially in order to comply with a husband's duty to
provide support under Article XV of the 1987 Constitution and
the Family Code.
Petitioner Edna Mabugay-Otamias (Edna) and retired Colonel
Francisco B. Otamias (Colonel Otamias) were married on June
16, 1978 and had five (5) children.
On September 2000, Edna and Colonel Otamias separated due
to his alleged infidelity.2 Their children remained with Edna.
On August 2002, Edna filed a Complaint-Affidavit against
Colonel Otamias before the Provost Marshall Division of the
Armed Forces of the Philippines.4 Edna demanded monthly
support equivalent to 75% of Colonel Otamias' retirement
benefits.5 Colonel Otamias executed an Affidavit, stating:
That sometime in August or September 2002, I was
summoned at the Office of the Provost Marshal,
Philippine Army, in connection with a complaint
affidavit submitted to said Office by my wife Mrs.
Edna M. Otamias signifying her intention 75% of my
retirement benefits from the AFP;
That at this point, I can only commit 50% of my
retirement benefits to be pro-rated among my wife
and five (5) children;
That in order to implement this compromise, I am
willing to enter into Agreement with my wife
covering the same;
That I am executing this affidavit to attest to the truth
of the foregoing facts and whatever legal purpose it
may serve.
On February 26, 2003, Colonel Otamias executed a Deed of
Assignment where he waived 50% of his salary and pension
benefits in favor of Edna and their children.7 The Deed of
Assignment was considered by the parties as a compromise
agreement.8 It stated:
This Assignment, made and executed unto this 26th
day of February 2003 at Fort Bonifacio, Makati City,
by the undersigned LTC Francisco B. Otamias, 0-0-
111045 (INP) PA, of legal age, married and presently
residing at Dama De Noche St., Pembo, Makati City.
WITNESSETH
WHEREAS, the undersigned affiant is the legal
husband of EDNA M. OTAMIAS and the father of
Julie Ann, Jonathan, Jennifer, Jeffren and Jemwel all
residing at Patag, Cagayan de Oro City;
WHEREAS, the undersigned will be retiring from the
military service and expects to receive retirement
benefits from the Armed Forces of the Philippines;
WHEREAS, the undersigned had expressed his
willingness to give a share in his retirement benefits
to my wife and five (5) abovenamed children,
NOW, THEREFORE, for and in consideration of the
foregoing premises, the undersigned hereby
stipulated the following:
1. That the undersigned will give to my legal wife and
five (5) children FIFTY PERCENT (50%) of my
retirement benefits to be pro rated among them.
2. That a separate check(s) be issued and to be drawn
and encash [sic] in the name of the legal wife and five
(5) children pro-rating the fifty (50%) percent of my
retirement benefits.
IN WITNESS WHEREOF, I have hereunto set my hand
this 26th day of February 2003 at Fort Bonifacio,
Makati City.
Colonel Otamias retired on April 1, 2003.
The agreement was honored until January 6, 2006.11 Edna
alleged that "the A[rmed] F[orces] [of the] Philippines]
suddenly decided not to honor the agreement"12 between
Colonel Otamias and his legitimate family.
In a letter13 dated April 3, 2006, the Armed Forces of the
Philippines Pension and Gratuity Management Center (AFP
PGMC) informed Edna that a court order was required for the
AFP PGMC to recognize the Deed of Assignment.
In another letter15 dated April 17, 2006, the AFP PGMC
reiterated that it could not act on Edna's request to receive a
portion of Colonel Otamias' pension "unless ordered by [the]
appropriate court."
Heeding the advice of the AFP PGMC, Edna, on behalf of
herself and Jeffren M. Otamias and Jemwel M. Otamias (Edna,
et al.), filed before the Regional Trial Court of Cagayan de Oro,
Misamis Oriental an action for support, docketed as F.C. Civil
Case No. 2006-039.
The trial court's Sheriff tried to serve summons on Colonel
Otamias several times, to no avail.18 Substituted service was
resorted to.19 Colonel Otamias was subsequently declared in
default for failure to file a responsive pleading despite order of
the trial court.
The trial court ruled in favor of Edna, et al. and ordered the
automatic deduction of the amount of support from the
monthly pension of Colonel Otamias.
The dispositive portion of the trial court's Decision stated:
ALL THE FOREGOING CONSIDERED, and in consonance with
the legal obligation of the defendant to the plaintiffs, the
Armed Forces of the Philippines, through its Finance Center
and/or appropriate Finance Officer thereof, is thereby ordered
to release to Edna Mabugay Otamias and minor Jemwel M.
Otamias, herein represented by his mother Edna, their fifty
(50%) per cent share of each of the monthly pension due to
Colonel Francisco B. Otamias, AFP PA (Retired).
Defendant Francisco Otamias is also ordered to pay plaintiff
Edna M. Otamias, fifty (50%) per cent of whatever retirement
benefits he has already received from the Armed Forces of the
Philippines AND the arrears in support, effective January 2006
up to the time plaintiff receives her share direct from the
Finance Center of the Armed Forces of the Philippines.
IT IS SO ORDERED.
The Armed Forces of the Philippines, through the Office of the
Judge Advocate General, filed a Manifestation/Opposition23 to
the Decision of the trial court, but it was not given due course
due to its late filing.
Edna, et al., through counsel, filed a Motion for Issuance of Writ
of Execution25 dated February 22, 2008. The trial court granted
the Motion, and a writ of execution was issued by the trial court
on April 10, 2008.
The Armed Forces of the Philippines Finance Center (AFP
Finance Center), tlirough the Office of the Judge Advocate
General, filed a Motion to Quash27 the writ of execution and
argued that the AFP Finance Center's duty to disburse benefits
is ministerial. It releases benefits only upon the AFP PGMC's
approval.
The trial court denied the Motion to Quash and held that:
Under the law and existing jurisprudence, the "right to support"
is practically equivalent to the "right to life." The "right to life"
always takes precedence over "property rights." The "right to
support/life" is also a substantive right which always takes
precedence over technicalities/procedural rules. It being so,
technical rules must yield to substantive justice. Besides, this
Court's Decision dated February 27, 2007 has long acquired
finality, and as such, is ripe for enforcement/execution.
THE FOREGOING CONSIDERED, the instant Motion is hereby
DENIED.29cralawred
The AFP PGMC moved for reconsideration of the order denying
the Motion to Quash,30 but the Motion was also denied by the
trial court in the Order31 dated August 6, 2008.
A Notice of Garnishment was issued by the trial court on July
15, 2008 and was received by the AFP PGMC on September 9,
2008.
The AFP PGMC filed before the Court of Appeals a Petition for
Certiorari and Prohibition.
The Court of Appeals granted34 the Petition for Certiorari and
Prohibition and partially nullified the trial court's Decision
insofar as it directed the automatic deduction of support from
the pension benefits of Colonel Otamias.
The Court of Appeals discussed that Section 3135 of
Presidential Decree No. 1638, otherwise known as the AFP
Military Personnel Retirement and Separation Decree of 1979,
"provides for the exemption of the monthly pension of retired
military personnel from execution and attachment[,]"36 while
Rule 39, Section 13 of the Rules of Court provides:
SEC. 13. Property exempt from execution. Except as otherwise
expressly provided by law, the following property, and no
other, shall be exempt from execution:
(1) The right to receive legal support, or money or property
obtained as such support, or any pension or gratuity from the
Government[.]
The Court of Appeals also cited Pacific Products, Inc. vs. Ong:37
[M]oneys sought to be garnished, as long as they remain in the
hands of the disbursing officer of the Government, belong to
the latter, although the defendant in garnishment may be
entitled to a specific portion thereof. And still another reason
which covers both of the foregoing is that every consideration
of public policy forbids it.
In addition, the AFP PGMC was not impleaded as a party in the
action for support; thus, it is not bound by the Decision.
The dispositive portion of the Court of Appeals Decision reads:
WHEREFORE, the petition is GRANTED. The assailed Decision
of the Regional Trial Court, Branch 19, Cagayan de Oro City
dated February 27, 2007 in Civil Case No. 2006-039 is
PARTIALLY NULLIFIED in so far as it directs the Armed Forces
of the Philippines Finance Center to automatically deduct the
financial support in favor of private respondents, Edna Otamias
and her children Jeffren and Jemwel Otamias, from the pension
benefits of Francisco Otamias, a retired military officer. The
Order dated June 10, 2008, Order dated August 6, 2008 and
Writ of Execution dated April 10, 2008, all issued by the court a
quo are likewise SET ASIDE. Perforce, let a writ of permanent
injunction issue enjoining the implementation of the assailed
Writ of Execution dated April 10, 2008 and the corresponding
Notice of Garnishment dated July 15, 2008. No pronouncement
as to costs.
SO ORDERED.40
Edna, et al. moved for reconsideration, but the Motion was
denied by the Court of Appeals.
Edna, et al. filed before this Court a Petition for Review on
Certiorari42 on November 11, 2009. In the Resolution43 dated
January 20, 2010, this Court required respondent to comment.
In the Resolution44 dated August 4, 2010, this Court noted the
Comment filed by the Office of the Solicitor General and
required Edna, et al. to file a reply.
A Reply46 was filed on September 27, 2010.
Edna, et al. argue that the Deed of Assignment Colonel
Otamias executed Is valid and legal.
They claim that Section 31 of Presidential Decree No. 163848
"does not include support";49 hence, the retirement benefits of
Colonel Otamias can be executed upon.
Edna, et al. also argue that the Court of Appeals erred in
granting respondent's Petition because it effectively rendered
the Deed of Assignment of no force and effect.50 On the other
hand, the trial court's Decision implements the Deed of
Assignment and Edna, et al.'s right to support.
Further, the AFP PGMC had already recognized the validity of
the agreement and had made payments to them until it
suddenly stopped payment.52 After Edna, et al. obtained a
court order, the AFP PGMC still refused to honor the Deed of
Assignment.
The Armed Forces of the Philippines, through the Office of the
Solicitor General, argues that it was not a party to the case filed
by Edna, et al.54 Thus, "it cannot be compelled to release part
of the monthly pension benefits of retired Colonel Otamias in
favor of [Edna, et al]."
The Office of the Solicitor General avers that the AFP PGMC
never submitted itself to the jurisdiction of the trial court.56 It
was not a party to the case as the trial court never acquired
jurisdiction over the AFP PGMC.
The Office of the Solicitor General also argues that Section 31
of Presidential Decree No. 1638 and Rule 39, Section 13(1) of
the Rules of Court support the Court of Appeals Decision that
Colonel Otamias' pension benefits are exempt from execution.
Section 31 of Presidential Decree No. 1638 "does not deprive
the survivor/s of a retired or separated officer or enlisted man of
their right to support."59 Rather, "[w]hat is prohibited is for
respondent [AFP PGMC] to segregate a portion of the pension
benefit in favor of the retiree's family while still in the hands of
the A[rmed] F[orces] [of the] Philippines]."
Thus, the AFP PGMC "cannot be compelled to directly give or
issue a check in favor of [Edna, et al.] out of the pension
gratuity of Col. Otamias."
In their Reply,62 Edna, et al. argue that the Armed Forces of
the Philippines should not be allowed to question the legal
recourse they took because it was an officer of the Armed
Forces of the Philippines who had advised them to file an action
for support.
They argue that the phrase "while in the active service" in
Section 31 of Presidential Decree No. 1638 refers to the "time
when the retired officer incurred his accountabilities in favor of
a private creditor[,]"64 who is a third person. The phrase also
"serves as a timeline designed to separate the debts incurred by
the retired officer after his retirement from those which he
incurred prior thereto."
Further, the accountabilities referred to in Section 31 of
Presidential Decree No. 1638 refer to debts or loans, not to
support.
The issues for resolution are:
First, whether the Court of Appeals erred in ruling that the AFP
Finance Center cannot be directed to automatically deduct the
amount of support needed by the legitimate family of Colonel
Otamias; and
Second, whether Colonel Otamias' pension benefits can be
executed upon for the financial support of his legitimate family.
The Petition is granted.
I respected in the absence of allegations that Colonel Otamias
Article 6 of the Civil Code provides:
Article 6. Rights may be waived, unless the waiver is contrary to
law, public order, public policy, morals or good customs, or
prejudicial to a third person with a right recognized by law.
The concept of waiver has been defined by this Court as:
a voluntary and intentional relinquishment or abandonment of
a known existing legal right, advantage, benefit, claim or
privilege, which except for such waiver the party would have
enjoyed; the voluntary abandonment or surrender, by a
capable person, of a right known by him to exist, with the
intent that such right shall be surrendered and such person
forever deprived of its benefit; or such conduct as warrants an
inference of the relinquishment of such right; or the intentional
doing of an act inconsistent with claiming it.
In determining whether a statutory right can be waived, this
Court is guided by the following pronouncement:
[T]he doctrine of waiver extends to rights and privileges of any
character, and, since the word 'waiver' covers every conceivable
right, it is the general rule that a person may waive any matter
which affects his property, and any alienable right or privilege
of which he is the owner or which belongs to him or to which he
is legally entitled, whether secured by contract, conferred with
statute, or guaranteed by constitution, provided such rights
and privileges rest in the individual, are intended for his sole
benefit, do not infringe on the rights of others, and further
provided the waiver of the right or privilege is not forbidden by
law, and does not contravene public policy; and the principle is
recognized that everyone has a right to waive, and agree to
waive, the advantage of a law or rule made solely for the
benefit and protection of the individual in his private capacity, if
it can be dispensed with and relinquished without infringing on
any public right, and without detriment to the community at
large[.]68 (Emphasis in the original)
When Colonel Otamias executed the Deed of Assignment, he
effectively waived his right to claim that his retirement benefits
are exempt from execution. The right to receive retirement
benefits belongs to Colonel Otamias. His decision to waive a
portion of his retirement benefits does not infringe on the right
of third persons, but even protects the right of his family to
receive support.
In addition, the Deed of Assignment should be considered as
the law between the parties, and its provisions should be
was coerced or defrauded in executing it. The general rule is
that a contract is the law between parties and parties are free
to stipulate terms and conditions that are not contrary to law,
morals, good customs, public order, or public policy.
The Deed of Assignment executed by Colonel Otamias was not
contrary to law; it was in accordance with the provisions on
support in the Family Code. Hence, there was no reason for the
AFP PGMC not to recognize its validity.
Further, this Court notes that the AFP PGMC granted the
request for support of the wives of other retired military
personnel in a similar situation as that of petitioner in this case.
Attached to the Petition are the affidavits of the wives of
retired members of the military, who have received a portion of
their husbands' pensions.
One affidavit stated:
That when I consulted and appeared before the Office
of PGMC, I was instructed to submit a Special Power
of Authority from my husband so they can release
part of his pension to me;
That my husband signed the Special Power of
Attorney at the PGMC ceding 50% of his pension to
me; the SPA form was given to us by the PGMC and
the same was signed by my husband at the PGMC;. . .
That the amount was deposited directly to my
account by the PGMC- Finance Center AFP out of the
pension of my husband;
That only the Special Power of Attorney was required
by the PGMC in order for them to segregate my share
of my husband's pension and deposit the same to my
account[.]71
The other affidavit stated:
That my husband signed the Special Power of
Attorney at the PGMC ceding 50% of his pension to
me; the SPA form was given to us by the PGMC and
the same was signed by my husband at the
PGMC[.]72
Clearly, the AFP PGMC allows deductions from a retiree's
pension for as long as the retiree executes a Special Power of
Attorney authorizing the AFP PGMC to deduct a certain
amount for the benefit of the retiree's beneficiary.
It is curious why Colonel Otamias was allowed to execute a
Deed of Assignment by the administering officer when, in the
first place, the AFP PGMC's recognized procedure was to
execute a Special Power of Attorney, which would have been
the easier remedy for Colonel Otamias' family.
Instead, Colonel Otamias' family was forced to incur litigation
expenses just to be able to receive the financial support that
Colonel Otamias was willing to give to Edna, et al.
II
Section 31 of Presidential Decree No. 1638 provides:
Section 31. The benefits authorized under this Decree, except
as provided herein, shall not be subject to attachment,
garnishment, levy, execution or any tax whatsoever; neither
shall they be assigned, ceded, or conveyed to any third person:
Provided, That if a retired or separated officer or enlisted man
who is entitled to any benefit under this Decree has unsettled
money and/or property accountabilities incurred while in the
active service, not more than fifty per centum of the pension
gratuity or other payment due such officer or enlisted man or
his survivors under this Decree may be withheld and be applied
to settle such accountabilities.
Under Section 31, Colonel Otamias' retirement benefits are
exempt from execution. Retirement benefits are exempt from
execution so as to ensure that the retiree has enough funds to
support himself and his family.
On the other hand, the right to receive support is provided
under the Family Code. Article 194 of the Family Code defines
support as follows:
Art. 194. Support comprises everything indispensable for
sustenance, dwelling, clothing, medical attendance, education
and transportation, in keeping with the financial capacity of the
family.
The education of the person entitled to be supported referred
to in the preceding paragraph shall include his schooling or
training for some profession, trade or vocation, even beyond
the age of majority. Transportation shall include expenses in
going to and from school, or to and from place of work.
The provisions of the Family Code also state who are obliged to
give support, thus:
Art. 195. Subject to the provisions of the succeeding articles,
the following are obliged to support each other to the whole
extent set forth in the preceding article:
(1) The spouses;
(2) Legitimate ascendants and descendants;
(3) Parents and their legitimate children and the legitimate and
illegitimate children of the latter;
(4) Parents and their illegitimate children and the legitimate
and illegitimate children of the latter; and
(5) Legitimate brothers and sisters, whether of the full or half-
blood.
Art. 196. Brothers and sisters not legitimately related, whether
of the full or half-blood, are likewise bound to support each
other to the full extent set forth in Article 194 except only when
the need for support of the brother or sister, being of age, is
due to a cause imputable to the claimant's fault or negligence.
Art. 197. For the support of legitimate ascendants;
descendants, whether legitimate or illegitimate; and brothers
and sisters, whether legitimately or illegitimately related, only
the separate property of the person obliged to give support
shall be answerable provided that in case the obligor has no
separate property, the absolute community or the conjugal
partnership, if financially capable, shall advance the support,
which shall be deducted from the share of the spouses obliged
upon the liquidation of the absolute community or of the
conjugal partnership[.]
The provisions of Rule 39 of the Rules of Court that are
applicable to this case are in apparent conflict with each other.
Section 4 provides that judgments in actions for support are
immediately executory. On the other hand, Section 13(1)
provides that the right to receive pension from government is
exempt from execution, thus:
RULE 39
EXECUTION, SATISFACTION, AND EFFECT OF JUDGMENTS
SEC. 4. Judgments not stayed by appeal. — Judgments in
actions for injunction, receivership, accounting and support,
and such other judgments as are now or may hereafter be
declared to be immediately executory, shall be enforceable
after their rendition and shall not, be stayed by an appeal taken
therefrom, unless otherwise ordered by the trial court. On
appeal therefrom, the appellate court in its discretion may
make an order suspending, modifying, restoring or granting the
injunction, receivership, accounting, or award of support.
The stay of execution shall be upon such terms as to bond or
otherwise as may be considered proper for the security or
protection of the rights of the adverse party.
SEC. 13. Property exempt from execution. — Except as
otherwise expressly provided by law, the following property,
and no other, shall be exempt from execution:
(1) The right to receive legal support, or money or property
obtained as such support, or any pension or gratuity from the
Government;
But no article or species of property mentioned in this section
shall be exempt from execution issued upon a judgment
recovered for its price or upon a judgment of foreclosure of a
mortgage thereon.
Based on the Family Code, Colonel Otamias is obliged to give
support to his family, petitioners in this case. However, he
retired in 2003, and his sole source of income is his pension.
Judgments in actions for support are immediately executory,
yet under Section 31 of Presidential Decree No. 1638, his
pension cannot be executed upon.
However, considering that Colonel Otamias has waived a
portion of his retirement benefits through his Deed of
Assignment, resolution on the conflict between the civil code
provisions on support and Section 31 of Presidential Decree No.
1638 should be resolved in a more appropriate case.
III
Republic v. Yahon74 is an analogous case because it involved
the grant of support to the spouse of a retired member of the
Armed Forces of the Philippines.
In Republic v. Yahon, Daisy R. Yahon filed a Petition for the
Issuance of Protection Order under Republic Act No. 9262.75
She alleged that she did not have any source of income
because her husband made her resign from her job.76 The trial
court issued a temporary restraining order, a portion of which
stated:
To insure that petitioner [Daisy R. Yahon] can receive a fair
share of respondent's retirement and other benefits, the
following agencies thru their heads are directed to WITHHOLD
any retirement, pension [,] and other benefits of respondent,
S/SGT. CHARLES A. YAHON, a member of the Armed Forces of
the Philippines assigned at 4ID, Camp Evangelista, Patag,
Cagayan de Oro City until further orders from the court:
1. Commanding General/Officer of the Finance Center of the
Armed Forces of the Philippines, Camp Emilio Aguinaldo,
Quezon City;
2. The Management of RSBS, Camp Emilio Aguinaldo, Quezon
City;
3. The Regional Manager of PAG-IBIG, Mortola St., Cagayan de
Oro City.77
The trial court subsequently granted Daisy's Petition and issued
a permanent protection order78 and held:
Pursuant to the order of the court dated February 6, 2007,
respondent, S/Sgt. Charles A. Yahon is directed to give it to
petitioner 50% of whatever retirement benefits and other
claims that may be due or released to him from the
government and the said share of petitioner shall be
automatically deducted from respondent's benefits and claims
and be given directly to the petitioner, Daisy R. Yahon.
Let copy of this decision be sent to the Commanding
General/Officer of Finance Center of the Armed Forces of the
Philippines, Camp Emilio Aguinaldo, Quezon City; the
Management of RSBS, Camp Emilio Aguinaldo, Quezon City
and the Regional Manager of PAG-IBIG, Mortola St., Cagayan
de Oro City for their guidance and strict compliance.
In that case, the AFP Finance Center filed before the trial court
a Manifestation and Motion stating that "it was making a
limited and special appearance"80 and argued that the trial
court did not acquire jurisdiction over the Armed Forces of the
Philippines. Hence, the Armed Forces of the Philippines is not
bound by the trial court's ruling.
The Armed Forces of the Philippines also cited Pacific Products,
where this Court ruled that:
A rule, which has never been seriously questioned, is that
money in the hands of public officers, although it may be due
government employees, is not liable to the creditors of these
employees in the process of garnishment. One reason is, that
the State, by virtue of its sovereignty may not be sued in its
own courts except by express authorization by the Legislature,
and to subject its officers to garnishment would be to permit
indirectly what is prohibited directly. Another reason is that
moneys sought to be garnished, as long as they remain in the
hands of the disbursing officer of the Government, belong to
the latter, although the defendant in garnishment may be
entitled to a specific portion thereof. And still another reason
which covers both of the foregoing is that every consideration
of public policy forbids it.82
This Court in Republic v. Yahon denied the Petition and
discussed that because Republic Act No. 9262 is the later
enactment, its provisions should prevail,83 thus:
We hold that Section 8(g) of R.A. No. 9262, being a later
enactment, should be construed as laying down an exception
to the general rule above stated that retirement benefits are
exempt from execution. The law itself declares that the court
shall order the withholding of a percentage of the income or
salary of the respondent by the employer, which shall be
automatically remitted directly to the woman
IV
The 1987 Constitution gives much importance to the family as
the basic unit of society, such that Article XV85 is devoted to it.
The passage of the Family Code further implemented Article
XV of the Constitution. This Court has recognized the
importance of granting support to minor children, provided
that the filiation of the child is proven. In this case, the filiation
of Jeffren M. Otamias and Jemwel M. Otamias was admitted by
Colonel Otamias in the Deed of Assignment.
Even before the passage of the Family Code, this Court has
given primary consideration to the right of a child to receive
support. In Samson v. Yatco,87 a petition for support was
dismissed with prejudice by the trial court on the ground that
the minor asking for support was not present in court during
trial. An appeal was filed, but it was dismissed for having been
filed out of time. This Court relaxed the rules of procedure and
held that "[i]f the order of dismissal with prejudice of the
petition for support were to stand, the petitioners would be
deprived of their right to present and nature support."
In Gan v. Reyes,89 Augustus Caezar R. Gan (Gan) questioned
the trial court's decision requiring him to give support and
claimed that that he was not the father of the minor seeking
support. He also argued that he was not given his day in court.
This Court held that Gan's arguments were meant to delay the
execution of the judgment, and that in any case, Gan himself
filed a Motion for Leave to Deposit in Court Support Pendente
Lite:
In all cases involving a child, his interest and welfare are always
the paramount concerns. There may be instances where, in
view of the poverty of the child, it would be a travesty of justice
to refuse him support until the decision of the trial court attains
finality while time continues to slip away. An excerpt from the
early case of De Leon v. Soriano is relevant, thus:
The money and property adjudged for support and education
should and must be given presently and without delay because
if it had to wait the final judgment, the children may in the
meantime have suffered because of lack of food or have missed
and lost years in school because of lack of funds. One cannot
delay the payment of such funds for support and education for
the reason that if paid long afterwards, however much the
accumulated amount, its payment cannot cure the evil and
repair the damage caused. The children with such belated
payment for support and education cannot act as gluttons and
eat voraciously and unwisely, afterwards, to make up for the
years of hunger and starvation. Neither may they enrol in
several classes and schools and take up numerous subjects all
at once to make up for the years they missed in school, due to
non-payment of the funds when needed.
V
The non-inclusion of the AFP PGMC or the AFP Finance Center
in the action for support was proper, considering that both the
AFP PGMC and the AFP Finance Center are not the persons
obliged to give support to Edna, et al. Thus, it was not a real
party-in-interest.91 Nor was the AFP PGMC a necessary party
because complete relief could be obtained even without
impleading the AFP PGMC.
WHEREFORE, the Petition is GRANTED. The Court of Appeals
Decision dated May 22, 2009 and Resolution dated August 11,
2009 in CA-G.R. SP No. 02555-MIN are REVERSED and SET
ASIDE. The Regional Trial Court Decision dated February 27,
2007 in F.C. Civil Case No. 2006-039 is REINSTATED.
SO ORDERED.
DUTY TO RENDER JUDGMENT
SILVERIO VS REPUBLIC
CORONA, J.:
When God created man, He made him in the likeness of God;
He created them male and female. (Genesis 5:1-2)
Amihan gazed upon the bamboo reed planted by Bathala and
she heard voices coming from inside the bamboo. "Oh North
Wind! North Wind! Please let us out!," the voices said. She
pecked the reed once, then twice. All of a sudden, the bamboo
cracked and slit open. Out came two human beings; one was a
male and the other was a female. Amihan named the man
"Malakas" (Strong) and the woman "Maganda" (Beautiful). (The
Legend of Malakas and Maganda)
When is a man a man and when is a woman a woman? In
particular, does the law recognize the changes made by a
physician using scalpel, drugs and counseling with regard to a
person’s sex? May a person successfully petition for a change of
name and sex appearing in the birth certificate to reflect the
result of a sex reassignment surgery?
On November 26, 2002, petitioner Rommel Jacinto Dantes
Silverio filed a petition for the change of his first name and sex
in his birth certificate in the Regional Trial Court of Manila,
Branch 8. The petition, docketed as SP Case No. 02-105207,
impleaded the civil registrar of Manila as respondent.
Petitioner alleged in his petition that he was born in the City of
Manila to the spouses Melecio Petines Silverio and Anita
Aquino Dantes on April 4, 1962. His name was registered as
"Rommel Jacinto Dantes Silverio" in his certificate of live birth
(birth certificate). His sex was registered as "male."
He further alleged that he is a male transsexual, that is,
"anatomically male but feels, thinks and acts as a female" and
that he had always identified himself with girls since
childhood.1 Feeling trapped in a man’s body, he consulted
several doctors in the United States. He underwent
psychological examination, hormone treatment and breast
augmentation. His attempts to transform himself to a "woman"
culminated on January 27, 2001 when he underwent sex
reassignment surgery2 in Bangkok, Thailand. He was thereafter
examined by Dr. Marcelino Reysio-Cruz, Jr., a plastic and
reconstruction surgeon in the Philippines, who issued a medical
certificate attesting that he (petitioner) had in fact undergone
the procedure.
From then on, petitioner lived as a female and was in fact
engaged to be married. He then sought to have his name in his
birth certificate changed from "Rommel Jacinto" to "Mely," and
his sex from "male" to "female."
An order setting the case for initial hearing was published in the
People’s Journal Tonight, a newspaper of general circulation in
Metro Manila, for three consecutive weeks.3 Copies of the
order were sent to the Office of the Solicitor General (OSG) and
the civil registrar of Manila.
On the scheduled initial hearing, jurisdictional requirements
were established. No opposition to the petition was made.
During trial, petitioner testified for himself. He also presented
Dr. Reysio-Cruz, Jr. and his American fiancé, Richard P. Edel, as
witnesses.
On June 4, 2003, the trial court rendered a decision4 in favor of
petitioner. Its relevant portions read:
Petitioner filed the present petition not to evade any law or
judgment or any infraction thereof or for any unlawful motive
but solely for the purpose of making his birth records
compatible with his present sex.
The sole issue here is whether or not petitioner is entitled to the
relief asked for.
The [c]ourt rules in the affirmative.
Firstly, the [c]ourt is of the opinion that granting the petition
would be more in consonance with the principles of justice and
equity. With his sexual [re-assignment], petitioner, who has
always felt, thought and acted like a woman, now possesses
the physique of a female. Petitioner’s misfortune to be trapped
in a man’s body is not his own doing and should not be in any
way taken against him.
Likewise, the [c]ourt believes that no harm, injury [or] prejudice
will be caused to anybody or the community in granting the
petition. On the contrary, granting the petition would bring the
much-awaited happiness on the part of the petitioner and her
[fiancé] and the realization of their dreams.
Finally, no evidence was presented to show any cause or
ground to deny the present petition despite due notice and
publication thereof. Even the State, through the [OSG] has not
seen fit to interpose any [o]pposition.
WHEREFORE, judgment is hereby rendered GRANTING the
petition and ordering the Civil Registrar of Manila to change the
entries appearing in the Certificate of Birth of [p]etitioner,
specifically for petitioner’s first name from "Rommel Jacinto" to
MELY and petitioner’s gender from "Male" to FEMALE. 5
On August 18, 2003, the Republic of the Philippines (Republic),
thru the OSG, filed a petition for certiorari in the Court of
Appeals.6 It alleged that there is no law allowing the change of
entries in the birth certificate by reason of sex alteration.
On February 23, 2006, the Court of Appeals7 rendered a
decision8 in favor of the Republic. It ruled that the trial court’s
decision lacked legal basis. There is no law allowing the change
of either name or sex in the certificate of birth on the ground of
sex reassignment through surgery. Thus, the Court of Appeals
granted the Republic’s petition, set aside the decision of the
trial court and ordered the dismissal of SP Case No. 02-105207.
Petitioner moved for reconsideration but it was denied.9
Hence, this petition.
Petitioner essentially claims that the change of his name and
sex in his birth certificate is allowed under Articles 407 to 413 of
the Civil Code, Rules 103 and 108 of the Rules of Court and RA
9048.10
The petition lacks merit.
A Person’s First Name Cannot Be Changed On the Ground of
Sex Reassignment
Petitioner invoked his sex reassignment as the ground for his
petition for change of name and sex. As found by the trial
court:
Petitioner filed the present petition not to evade any law or
judgment or any infraction thereof or for any unlawful motive
but solely for the purpose of making his birth records
compatible with his present sex. (emphasis supplied)
Petitioner believes that after having acquired the physical
features of a female, he became entitled to the civil registry
changes sought. We disagree.
The State has an interest in the names borne by individuals and
entities for purposes of identification.11 A change of name is a
privilege, not a right.12 Petitions for change of name are
controlled by statutes.13 In this connection, Article 376 of the
Civil Code provides:
ART. 376. No person can change his name or surname without
judicial authority.
This Civil Code provision was amended by RA 9048 (Clerical
Error Law). In particular, Section 1 of RA 9048 provides:
SECTION 1. Authority to Correct Clerical or Typographical Error
and Change of First Name or Nickname. – No entry in a civil
register shall be changed or corrected without a judicial order,
except for clerical or typographical errors and change of first
name or nickname which can be corrected or changed by the
concerned city or municipal civil registrar or consul general in
accordance with the provisions of this Act and its implementing
rules and regulations.
RA 9048 now governs the change of first name.14 It vests the
power and authority to entertain petitions for change of first
name to the city or municipal civil registrar or consul general
concerned. Under the law, therefore, jurisdiction over
applications for change of first name is now primarily lodged
with the aforementioned administrative officers. The intent
and effect of the law is to exclude the change of first name from
the coverage of Rules 103 (Change of Name) and 108
(Cancellation or Correction of Entries in the Civil Registry) of
the Rules of Court, until and unless an administrative petition
for change of name is first filed and subsequently denied.15 It
likewise lays down the corresponding venue,16 form17 and
procedure. In sum, the remedy and the proceedings regulating
change of first name are primarily administrative in nature, not
judicial.
RA 9048 likewise provides the grounds for which change of first
name may be allowed:
SECTION 4. Grounds for Change of First Name or Nickname. –
The petition for change of first name or nickname may be
allowed in any of the following cases:
(1) The petitioner finds the first name or nickname to be
ridiculous, tainted with dishonor or extremely difficult to write
or pronounce;
(2) The new first name or nickname has been habitually and
continuously used by the petitioner and he has been publicly
known by that first name or nickname in the community; or
(3) The change will avoid confusion.
Petitioner’s basis in praying for the change of his first name was
his sex reassignment. He intended to make his first name
compatible with the sex he thought he transformed himself
into through surgery. However, a change of name does not
alter one’s legal capacity or civil status.18 RA 9048 does not
sanction a change of first name on the ground of sex
reassignment. Rather than avoiding confusion, changing
petitioner’s first name for his declared purpose may only create
grave complications in the civil registry and the public interest.
Before a person can legally change his given name, he must
present proper or reasonable cause or any compelling reason
justifying such change.19 In addition, he must show that he will
be prejudiced by the use of his true and official name.20 In this
case, he failed to show, or even allege, any prejudice that he
might suffer as a result of using his true and official name.
In sum, the petition in the trial court in so far as it prayed for the
change of petitioner’s first name was not within that court’s
primary jurisdiction as the petition should have been filed with
the local civil registrar concerned, assuming it could be legally
done. It was an improper remedy because the proper remedy
was administrative, that is, that provided under RA 9048. It was
also filed in the wrong venue as the proper venue was in the
Office of the Civil Registrar of Manila where his birth certificate
is kept. More importantly, it had no merit since the use of his
true and official name does not prejudice him at all. For all
these reasons, the Court of Appeals correctly dismissed
petitioner’s petition in so far as the change of his first name was
concerned.
No Law Allows The Change of Entry In The Birth Certificate As
To Sex On the Ground of Sex Reassignment
The determination of a person’s sex appearing in his birth
certificate is a legal issue and the court must look to the
statutes.21 In this connection, Article 412 of the Civil Code
provides:
ART. 412. No entry in the civil register shall be changed or
corrected without a judicial order.
Together with Article 376 of the Civil Code, this provision was
amended by RA 9048 in so far as clerical or typographical errors
are involved. The correction or change of such matters can now
be made through administrative proceedings and without the
need for a judicial order. In effect, RA 9048 removed from the
ambit of Rule 108 of the Rules of Court the correction of such
errors.22 Rule 108 now applies only to substantial changes and
corrections in entries in the civil register.23
Section 2(c) of RA 9048 defines what a "clerical or
typographical error" is:
SECTION 2. Definition of Terms. – As used in this Act, the
following terms shall mean:
(3) "Clerical or typographical error" refers to a mistake
committed in the performance of clerical work in writing,
copying, transcribing or typing an entry in the civil register that
is harmless and innocuous, such as misspelled name or
misspelled place of birth or the like, which is visible to the eyes
or obvious to the understanding, and can be corrected or
changed only by reference to other existing record or records:
Provided, however, That no correction must involve the change
of nationality, age, status or sex of the petitioner. (emphasis
supplied)
Under RA 9048, a correction in the civil registry involving the
change of sex is not a mere clerical or typographical error. It is a
substantial change for which the applicable procedure is Rule
108 of the Rules of Court.
The entries envisaged in Article 412 of the Civil Code and
correctable under Rule 108 of the Rules of Court are those
provided in Articles 407 and 408 of the Civil Code:24
ART. 407. Acts, events and judicial decrees concerning the civil
status of persons shall be recorded in the civil register.
ART. 408. The following shall be entered in the civil register:
(1) Births; (2) marriages; (3) deaths; (4) legal separations; (5)
annulments of marriage; (6) judgments declaring marriages
void from the beginning; (7) legitimations; (8) adoptions; (9)
acknowledgments of natural children; (10) naturalization; (11)
loss, or (12) recovery of citizenship; (13) civil interdiction; (14)
judicial determination of filiation; (15) voluntary emancipation
of a minor; and (16) changes of name.
The acts, events or factual errors contemplated under Article
407 of the Civil Code include even those that occur after
birth.25 However, no reasonable interpretation of the provision
can justify the conclusion that it covers the correction on the
ground of sex reassignment.
To correct simply means "to make or set aright; to remove the
faults or error from" while to change means "to replace
something with something else of the same kind or with
something that serves as a substitute."26 The birth certificate
of petitioner contained no error. All entries therein, including
those corresponding to his first name and sex, were all correct.
No correction is necessary.
Article 407 of the Civil Code authorizes the entry in the civil
registry of certain acts (such as legitimations,
acknowledgments of illegitimate children and naturalization),
events (such as births, marriages, naturalization and deaths)
and judicial decrees (such as legal separations, annulments of
marriage, declarations of nullity of marriages, adoptions,
naturalization, loss or recovery of citizenship, civil interdiction,
judicial determination of filiation and changes of name). These
acts, events and judicial decrees produce legal consequences
that touch upon the legal capacity, status and nationality of a
person. Their effects are expressly sanctioned by the laws. In
contrast, sex reassignment is not among those acts or events
mentioned in Article 407. Neither is it recognized nor even
mentioned by any law, expressly or impliedly.
"Status" refers to the circumstances affecting the legal
situation (that is, the sum total of capacities and incapacities)
of a person in view of his age, nationality and his family
membership.27
The status of a person in law includes all his personal qualities
and relations, more or less permanent in nature, not ordinarily
terminable at his own will, such as his being legitimate or
illegitimate, or his being married or not. The comprehensive
term status… include such matters as the beginning and end of
legal personality, capacity to have rights in general, family
relations, and its various aspects, such as birth, legitimation,
adoption, emancipation, marriage, divorce, and sometimes
even succession.28 (emphasis supplied)
A person’s sex is an essential factor in marriage and family
relations. It is a part of a person’s legal capacity and civil status.
In this connection, Article 413 of the Civil Code provides:
ART. 413. All other matters pertaining to the registration of civil
status shall be governed by special laws.
But there is no such special law in the Philippines governing sex
reassignment and its effects. This is fatal to petitioner’s cause.
Moreover, Section 5 of Act 3753 (the Civil Register Law)
provides:
SEC. 5. Registration and certification of births. – The
declaration of the physician or midwife in attendance at the
birth or, in default thereof, the declaration of either parent of
the newborn child, shall be sufficient for the registration of a
birth in the civil register. Such declaration shall be exempt from
documentary stamp tax and shall be sent to the local civil
registrar not later than thirty days after the birth, by the
physician or midwife in attendance at the birth or by either
parent of the newborn child.
In such declaration, the person above mentioned shall certify to
the following facts: (a) date and hour of birth; (b) sex and
nationality of infant; (c) names, citizenship and religion of
parents or, in case the father is not known, of the mother alone;
(d) civil status of parents; (e) place where the infant was born;
and (f) such other data as may be required in the regulations to
be issued.
Under the Civil Register Law, a birth certificate is a historical
record of the facts as they existed at the time of birth.29 Thus,
the sex of a person is determined at birth, visually done by the
birth attendant (the physician or midwife) by examining the
genitals of the infant. Considering that there is no law legally
recognizing sex reassignment, the determination of a person’s
sex made at the time of his or her birth, if not attended by
error,30 is immutable.31
When words are not defined in a statute they are to be given
their common and ordinary meaning in the absence of a
contrary legislative intent. The words "sex," "male" and
"female" as used in the Civil Register Law and laws concerning
the civil registry (and even all other laws) should therefore be
understood in their common and ordinary usage, there being
no legislative intent to the contrary. In this connection, sex is
defined as "the sum of peculiarities of structure and function
that distinguish a male from a female"32 or "the distinction
between male and female."33 Female is "the sex that produces
ova or bears young"34 and male is "the sex that has organs to
produce spermatozoa for fertilizing ova."35 Thus, the words
"male" and "female" in everyday understanding do not include
persons who have undergone sex reassignment. Furthermore,
"words that are employed in a statute which had at the time a
well-known meaning are presumed to have been used in that
sense unless the context compels to the contrary."36 Since the
statutory language of the Civil Register Law was enacted in the
early 1900s and remains unchanged, it cannot be argued that
the term "sex" as used then is something alterable through
surgery or something that allows a post-operative male-to-
female transsexual to be included in the category "female."
For these reasons, while petitioner may have succeeded in
altering his body and appearance through the intervention of
modern surgery, no law authorizes the change of entry as to
sex in the civil registry for that reason. Thus, there is no legal
basis for his petition for the correction or change of the entries
in his birth certificate.
Neither May Entries in the Birth Certificate As to First Name or
Sex Be Changed on the Ground of Equity
The trial court opined that its grant of the petition was in
consonance with the principles of justice and equity. It believed
that allowing the petition would cause no harm, injury or
prejudice to anyone. This is wrong.
The changes sought by petitioner will have serious and wide-
ranging legal and public policy consequences. First, even the
trial court itself found that the petition was but petitioner’s first
step towards his eventual marriage to his male fiancé.
However, marriage, one of the most sacred social institutions,
is a special contract of permanent union between a man and a
woman.37 One of its essential requisites is the legal capacity of
the contracting parties who must be a male and a female.38 To
grant the changes sought by petitioner will substantially
reconfigure and greatly alter the laws on marriage and family
relations. It will allow the union of a man with another man who
has undergone sex reassignment (a male-to-female post-
operative transsexual). Second, there are various laws which
apply particularly to women such as the provisions of the Labor
Code on employment of women,39 certain felonies under the
Revised Penal Code40 and the presumption of survivorship in
case of calamities under Rule 131 of the Rules of Court,41
among others. These laws underscore the public policy in
relation to women which could be substantially affected if
petitioner’s petition were to be granted.
It is true that Article 9 of the Civil Code mandates that "[n]o
judge or court shall decline to render judgment by reason of the
silence, obscurity or insufficiency of the law." However, it is not
a license for courts to engage in judicial legislation. The duty of
the courts is to apply or interpret the law, not to make or
amend it.
In our system of government, it is for the legislature, should it
choose to do so, to determine what guidelines should govern
the recognition of the effects of sex reassignment. The need for
legislative guidelines becomes particularly important in this
case where the claims asserted are statute-based.
To reiterate, the statutes define who may file petitions for
change of first name and for correction or change of entries in
the civil registry, where they may be filed, what grounds may
be invoked, what proof must be presented and what
procedures shall be observed. If the legislature intends to
confer on a person who has undergone sex reassignment the
privilege to change his name and sex to conform with his
reassigned sex, it has to enact legislation laying down the
guidelines in turn governing the conferment of that privilege.
It might be theoretically possible for this Court to write a
protocol on when a person may be recognized as having
successfully changed his sex. However, this Court has no
authority to fashion a law on that matter, or on anything else.
The Court cannot enact a law where no law exists. It can only
apply or interpret the written word of its co-equal branch of
government, Congress.
Petitioner pleads that "[t]he unfortunates are also entitled to a
life of happiness, contentment and [the] realization of their
dreams." No argument about that. The Court recognizes that
there are people whose preferences and orientation do not fit
neatly into the commonly recognized parameters of social
convention and that, at least for them, life is indeed an ordeal.
However, the remedies petitioner seeks involve questions of
public policy to be addressed solely by the legislature, not by
the courts.

WHEREFORE, the petition is hereby DENIED.

SO ORDERED.

OBLIGATORY EFFECT OF PENAL LAWS

DEL SOCORRO VS WILSEM

PERALTA, J.:

Before the Court is a petition for review on certiorari under Rule

45 of the Rules of Court seeking to reverse and set aside the
Orders1 dated February 19, 2010 and September 1, 2010,
respectively, of the Regional Trial Court of Cebu City (RTC-
Cebu), which dismissed the criminal case entitled People of the
Philippines v. Ernst Johan Brinkman Van Wilsem, docketed as
Criminal Case No. CBU-85503, for violation of Republic Act
(R.A.) No. 9262, otherwise known as the Anti-Violence Against
Women and Their Children Act of 2004.
The following facts are culled from the records:
Petitioner Norma A. Del Socorro and respondent Ernst Johan
Brinkman Van Wilsem contracted marriage in Holland on
September 25, 1990.2 On January 19, 1994, they were blessed
with a son named Roderigo Norjo Van Wilsem, who at the time
of the filing of the instant petition was sixteen (16) years of
age.3
Unfortunately, their marriage bond ended on July 19, 1995 by
virtue of a Divorce Decree issued by the appropriate Court of
Holland.4 At that time, their son was only eighteen (18) months
old.5 Thereafter, petitioner and her son came home to the
Philippines.6
According to petitioner, respondent made a promise to provide
monthly support to their son in the amount of Two Hundred
Fifty (250) Guildene (which is equivalent to Php17,500.00 more
or less).7 However, since the arrival of petitioner and her son in
the Philippines, respondent never gave support to the son,
Roderigo.8
Not long thereafter, respondent cameto the Philippines and
remarried in Pinamungahan, Cebu, and since then, have been
residing thereat.9 Respondent and his new wife established a
business known as Paree Catering, located at Barangay Tajao,
Municipality of Pinamungahan, Cebu City.10 To date, all the
parties, including their son, Roderigo, are presently living in
Cebu City.11
On August 28, 2009, petitioner, through her counsel, sent a
letter demanding for support from respondent. However,
respondent refused to receive the letter.12
Because of the foregoing circumstances, petitioner filed a
complaint affidavit with the Provincial Prosecutor of Cebu City
against respondent for violation of Section 5, paragraph E(2) of
R.A. No. 9262 for the latter’s unjust refusal to support his minor
child with petitioner.13 Respondent submitted his counter-
affidavit thereto, to which petitioner also submitted her reply-
affidavit.14 Thereafter, the Provincial Prosecutor of Cebu City
issued a Resolution recommending the filing of an information
for the crime charged against herein respondent.
The information, which was filed with the RTC-Cebu and raffled
to Branch 20 thereof, states that:
That sometime in the year 1995 and up to the present, more or
less, in the Municipality of Minglanilla, Province of Cebu,
Philippines, and within the jurisdiction of this Honorable Court,
the above-named accused, did then and there wilfully,
unlawfully and deliberately deprive, refuse and still continue to
deprive his son RODERIGO NORJO VAN WILSEM, a fourteen
(14) year old minor, of financial support legally due him,
resulting in economic abuse to the victim. CONTRARY TO
LAW.15
Upon motion and after notice and hearing, the RTC-Cebu
issued a Hold Departure Order against respondent.16
Consequently, respondent was arrested and, subsequently,
posted bail.17 Petitioner also filed a Motion/Application of
Permanent Protection Order to which respondent filed his
Opposition.18 Pending the resolution thereof, respondent was
arraigned.19 Subsequently, without the RTC-Cebu having
resolved the application of the protection order, respondent
filed a Motion to Dismiss on the ground of: (1) lack of
jurisdiction over the offense charged; and (2) prescription of the
crime charged.20
On February 19, 2010, the RTC-Cebu issued the herein assailed
Order,21 dismissing the instant criminal case against
respondent on the ground that the facts charged in the
information do not constitute an offense with respect to the
respondent who is an alien, the dispositive part of which states:
WHEREFORE, the Court finds that the facts charged in the
information do not constitute an offense with respect to the
accused, he being an alien, and accordingly, orders this case
DISMISSED.
The bail bond posted by accused Ernst Johan Brinkman Van
Wilsem for his provisional liberty is hereby cancelled (sic) and
ordered released.
SO ORDERED. Cebu City, Philippines, February 19, 2010.22
Thereafter, petitioner filed her Motion for Reconsideration
thereto reiterating respondent’s obligation to support their
child under Article 19523 of the Family Code, thus, failure to do
so makes him liable under R.A. No. 9262 which "equally applies
to all persons in the Philippines who are obliged to support
their minor children regardless of the obligor’s nationality."24
On September 1, 2010, the lower court issued an Order25
denying petitioner’s Motion for Reconsideration and reiterating
its previous ruling. Thus:
x x x The arguments therein presented are basically a rehash of
those advanced earlier in the memorandum of the prosecution.
Thus, the court hereby reiterates its ruling that since the
accused is a foreign national he is not subject to our national
law (The Family Code) in regard to a parent’s duty and
obligation to givesupport to his child. Consequently, he cannot
be charged of violating R.A. 9262 for his alleged failure to
support his child. Unless it is conclusively established that R.A.
9262 applies to a foreigner who fails to give support tohis child,
notwithstanding that he is not bound by our domestic law
which mandates a parent to give such support, it is the
considered opinion of the court that no prima faciecase exists
against the accused herein, hence, the case should be
dismissed.
WHEREFORE, the motion for reconsideration is hereby
DENIED for lack of merit.
SO ORDERED.
Cebu City, Philippines, September 1, 2010.26
Hence, the present Petition for Review on Certiorari raising the
following issues:
1. Whether or not a foreign national has an obligation to
support his minor child under Philippine law; and
2. Whether or not a foreign national can be held criminally
liable under R.A. No. 9262 for his unjustified failure to support
his minor child.27
At the outset, let it be emphasized that We are taking
cognizance of the instant petition despite the fact that the
same was directly lodged with the Supreme Court, consistent
with the ruling in Republic v. Sunvar Realty Development
Corporation,28 which lays down the instances when a ruling of
the trial court may be brought on appeal directly to the
Supreme Court without violating the doctrine of hierarchy of
courts, to wit:
x x x Nevertheless, the Rules do not prohibit any of the parties
from filing a Rule 45 Petition with this Court, in case only
questions of law are raised or involved. This latter situation was
one that petitioners found themselves in when they filed the
instant Petition to raise only questions of law. In Republic v.
Malabanan, the Court clarified the three modes of appeal from
decisions of the RTC, to wit: (1) by ordinary appeal or appeal by
writ of error under Rule 41, whereby judgment was rendered in
a civil or criminal action by the RTC in the exercise of its original
jurisdiction; (2) by a petition for review under Rule 42, whereby
judgment was rendered by the RTC in the exercise of its
appellate jurisdiction; and (3) by a petition for review on
certiorari before the Supreme Court under Rule 45. "The first
mode of appeal is taken to the [Court of Appeals] on questions
of fact or mixed questions of fact and law. The second mode of
appeal is brought to the CA on questions of fact, of law, or
mixed questions of fact and law. The third mode of appealis
elevated to the Supreme Court only on questions of law."
(Emphasis supplied)
There is a question of law when the issue does not call for an
examination of the probative value of the evidence presented
or of the truth or falsehood of the facts being admitted, and the
doubt concerns the correct application of law and jurisprudence
on the matter. The resolution of the issue must rest solely on
what the law provides on the given set of circumstances.29
Indeed, the issues submitted to us for resolution involve
questions of law – the response thereto concerns the correct
application of law and jurisprudence on a given set of facts,
i.e.,whether or not a foreign national has an obligation to
support his minor child under Philippine law; and whether or
not he can be held criminally liable under R.A. No. 9262 for his
unjustified failure to do so.
It cannot be negated, moreover, that the instant petition
highlights a novel question of law concerning the liability of a
foreign national who allegedly commits acts and omissions
punishable under special criminal laws, specifically in relation to
family rights and duties. The inimitability of the factual milieu
of the present case, therefore, deserves a definitive ruling by
this Court, which will eventually serve as a guidepost for future
cases. Furthermore, dismissing the instant petition and
remanding the same to the CA would only waste the time,
effort and resources of the courts. Thus, in the present case,
considerations of efficiency and economy in the administration
of justice should prevail over the observance of the hierarchy of
courts.
Now, on the matter of the substantive issues, We find the
petition meritorious. Nonetheless, we do not fully agree with
petitioner’s contentions.
To determine whether or not a person is criminally liable under
R.A. No. 9262, it is imperative that the legal obligation to
support exists.
Petitioner invokes Article 19530 of the Family Code, which
provides the parent’s obligation to support his child. Petitioner
contends that notwithstanding the existence of a divorce
decree issued in relation to Article 26 of the Family Code,31
respondent is not excused from complying with his obligation
to support his minor child with petitioner.
On the other hand, respondent contends that there is no
sufficient and clear basis presented by petitioner that she, as
well as her minor son, are entitled to financial support.32
Respondent also added that by reason of the Divorce Decree,
he is not obligated topetitioner for any financial support.33
On this point, we agree with respondent that petitioner cannot
rely on Article 19534 of the New Civil Code in demanding
support from respondent, who is a foreign citizen, since Article
1535 of the New Civil Code stresses the principle of nationality.
In other words, insofar as Philippine laws are concerned,
specifically the provisions of the Family Code on support, the
same only applies to Filipino citizens. By analogy, the same
principle applies to foreigners such that they are governed by
their national law with respect to family rights and duties.36
The obligation to give support to a child is a matter that falls
under family rights and duties. Since the respondent is a citizen
of Holland or the Netherlands, we agree with the RTC-Cebu
that he is subject to the laws of his country, not to
Philippinelaw, as to whether he is obliged to give support to his
child, as well as the consequences of his failure to do so.37
In the case of Vivo v. Cloribel,38 the Court held that –
Furthermore, being still aliens, they are not in position to
invoke the provisions of the Civil Code of the Philippines, for
that Code cleaves to the principle that family rights and duties
are governed by their personal law, i.e.,the laws of the nation
to which they belong even when staying in a foreign country
(cf. Civil Code, Article 15).39
It cannot be gainsaid, therefore, that the respondent is not
obliged to support petitioner’s son under Article195 of the
Family Code as a consequence of the Divorce Covenant
obtained in Holland. This does not, however, mean that
respondent is not obliged to support petitioner’s son
altogether.
In international law, the party who wants to have a foreign law
applied to a dispute or case has the burden of proving the
foreign law.40 In the present case, respondent hastily
concludes that being a national of the Netherlands, he is
governed by such laws on the matter of provision of and
capacity to support.41 While respondent pleaded the laws of
the Netherlands in advancing his position that he is not obliged
to support his son, he never proved the same.
It is incumbent upon respondent to plead and prove that the
national law of the Netherlands does not impose upon the
parents the obligation to support their child (either before,
during or after the issuance of a divorce decree), because
Llorente v. Court of Appeals,42 has already enunciated that:
True, foreign laws do not prove themselves in our jurisdiction
and our courts are not authorized to takejudicial notice of
them. Like any other fact, they must be alleged and proved.43
In view of respondent’s failure to prove the national law of the
Netherlands in his favor, the doctrine of processual
presumption shall govern. Under this doctrine, if the foreign
law involved is not properly pleaded and proved, our courts will
presume that the foreign law is the same as our local or
domestic or internal law.44 Thus, since the law of the
Netherlands as regards the obligation to support has not been
properly pleaded and proved in the instant case, it is presumed
to be the same with Philippine law, which enforces the
obligation of parents to support their children and penalizing
the non-compliance therewith.
Moreover, while in Pilapil v. Ibay-Somera,45 the Court held that
a divorce obtained in a foreign land as well as its legal effects
may be recognized in the Philippines in view of the nationality
principle on the matter of status of persons, the Divorce
Covenant presented by respondent does not completely show
that he is notliable to give support to his son after the divorce
decree was issued. Emphasis is placed on petitioner’s allegation
that under the second page of the aforesaid covenant,
respondent’s obligation to support his child is specifically
stated,46 which was not disputed by respondent.
We likewise agree with petitioner that notwithstanding that
the national law of respondent states that parents have no
obligation to support their children or that such obligation is
not punishable by law, said law would still not find
applicability,in light of the ruling in Bank of America, NT and SA
v. American Realty Corporation,47 to wit:
In the instant case, assuming arguendo that the English Law on
the matter were properly pleaded and proved in accordance
with Section 24, Rule 132 of the Rules of Court and the
jurisprudence laid down in Yao Kee, et al. vs. Sy-Gonzales, said
foreign law would still not find applicability.
Thus, when the foreign law, judgment or contract is contrary to
a sound and established public policy of the forum, the said
foreign law, judgment or order shall not be applied.
Additionally, prohibitive laws concerning persons, their acts or
property, and those which have for their object public order,
public policy and good customs shall not be rendered
ineffective by laws or judgments promulgated, or by
determinations or conventions agreed upon in a foreign
country.
The public policy sought to be protected in the instant case is
the principle imbedded in our jurisdiction proscribing the
splitting up of a single cause of action.
Section 4, Rule 2 of the 1997 Rules of Civil Procedure is
pertinent
If two or more suits are instituted on the basis of the same
cause of action, the filing of one or a judgment upon the merits
in any one is available as a ground for the dismissal of the
others. Moreover, foreign law should not be applied when its
application would work undeniable injustice to the citizens or
residents of the forum. To give justice is the most important
function of law; hence, a law, or judgment or contract that is
obviously unjust negates the fundamental principles of Conflict
of Laws.48
Applying the foregoing, even if the laws of the Netherlands
neither enforce a parent’s obligation to support his child nor
penalize the noncompliance therewith, such obligation is still
duly enforceable in the Philippines because it would be of great
injustice to the child to be denied of financial support when the
latter is entitled thereto.
We emphasize, however, that as to petitioner herself,
respondent is no longer liable to support his former wife, in
consonance with the ruling in San Luis v. San Luis,49 to wit:
As to the effect of the divorce on the Filipino wife, the Court
ruled that she should no longerbe considered marriedto the
alien spouse. Further, she should not be required to perform
her marital duties and obligations. It held:
To maintain, as private respondent does, that, under our laws,
petitioner has to be considered still married to private
respondent and still subject to a wife's obligations under Article
109, et. seq. of the Civil Code cannot be just. Petitioner should
not be obliged to live together with, observe respect and
fidelity, and render support to private respondent. The latter
should not continue to be one of her heirs with possible rights
to conjugal property. She should not be discriminated against
in her own country if the ends of justice are to be served.
(Emphasis added)50
Based on the foregoing legal precepts, we find that respondent
may be made liable under Section 5(e) and (i) of R.A. No. 9262
for unjustly refusing or failing to give support topetitioner’s
son, to wit:
SECTION 5. Acts of Violence Against Women and Their
Children.- The crime of violence against women and their
children is committed through any of the following acts:
(e) Attempting to compel or compelling the woman or her child
to engage in conduct which the woman or her child has the
right to desist from or desist from conduct which the woman or
her child has the right to engage in, or attempting to restrict or
restricting the woman's or her child's freedom of movement or
conduct by force or threat of force, physical or other harm or
threat of physical or other harm, or intimidation directed
against the woman or child. This shall include, butnot limited
to, the following acts committed with the purpose or effect of
controlling or restricting the woman's or her child's movement
or conduct:
(2) Depriving or threatening to deprive the woman or her
children of financial support legally due her or her family, or
deliberately providing the woman's children insufficient
financial support; x x x x
(i) Causing mental or emotional anguish, public ridicule or
humiliation to the woman or her child, including, but not
limited to, repeated verbal and emotional abuse, and denial of
financial support or custody of minor childrenof access to the
woman's child/children.51
Under the aforesaid special law, the deprivation or denial of
financial support to the child is considered anact of violence
against women and children.
In addition, considering that respondent is currently living in
the Philippines, we find strength in petitioner’s claim that the
Territoriality Principle in criminal law, in relation to Article 14 of
the New Civil Code, applies to the instant case, which provides
that: "[p]enal laws and those of public security and safety shall
be obligatory upon all who live and sojourn in Philippine
territory, subject to the principle of public international law and
to treaty stipulations." On this score, it is indisputable that the
alleged continuing acts of respondent in refusing to support his
child with petitioner is committed here in the Philippines as all
of the parties herein are residents of the Province of Cebu City.
As such, our courts have territorial jurisdiction over the offense
charged against respondent. It is likewise irrefutable that
jurisdiction over the respondent was acquired upon his arrest.
Finally, we do not agree with respondent’s argument that
granting, but not admitting, that there is a legal basis for
charging violation of R.A. No. 9262 in the instant case, the
criminal liability has been extinguished on the ground of
prescription of crime52 under Section 24 of R.A. No. 9262,
which provides that:
SECTION 24. Prescriptive Period. – Acts falling under Sections
5(a) to 5(f) shall prescribe in twenty (20) years. Acts falling
under Sections 5(g) to 5(I) shall prescribe in ten (10) years.
The act of denying support to a child under Section 5(e)(2) and
(i) of R.A. No. 9262 is a continuing offense,53 which started in
1995 but is still ongoing at present. Accordingly, the crime
charged in the instant case has clearly not prescribed.
Given, however, that the issue on whether respondent has
provided support to petitioner’s child calls for an examination
of the probative value of the evidence presented, and the truth
and falsehood of facts being admitted, we hereby remand the
determination of this issue to the RTC-Cebu which has
jurisdiction over the case.
WHEREFORE, the petition is GRANTED. The Orders dated
February 19, 2010 and September 1, 2010, respectively, of the
Regional Trial Court of the City of Cebu are hereby REVERSED
and SET ASIDE. The case is REMANDED to the same court to
conduct further proceedings based on the merits of the case.
SO ORDERED.
NATIONALITY THEORY
VAN DORN VS ROMILLO
MELENCIO-HERRERA, J.:
In this Petition for certiorari and Prohibition, petitioner Alice
Reyes Van Dorn seeks to set aside the Orders, dated
September 15, 1983 and August 3, 1984, in Civil Case No. 1075-
P, issued by respondent Judge, which denied her Motion to
Dismiss said case, and her Motion for Reconsideration of the
Dismissal Order, respectively.
The basic background facts are that petitioner is a citizen of the
Philippines while private respondent is a citizen of the United
States; that they were married in Hongkong in 1972; that, after
the marriage, they established their residence in the
Philippines; that they begot two children born on April 4, 1973
and December 18, 1975, respectively; that the parties were
divorced in Nevada, United States, in 1982; and that petitioner
has re-married also in Nevada, this time to Theodore Van Dorn.
Dated June 8, 1983, private respondent filed suit against
petitioner in Civil Case No. 1075-P of the Regional Trial Court,
Branch CXV, in Pasay City, stating that petitioner's business in
Ermita, Manila, (the Galleon Shop, for short), is conjugal
property of the parties, and asking that petitioner be ordered to
render an accounting of that business, and that private
respondent be declared with right to manage the conjugal
property. Petitioner moved to dismiss the case on the ground
that the cause of action is barred by previous judgment in the
divorce proceedings before the Nevada Court wherein
respondent had acknowledged that he and petitioner had "no
community property" as of June 11, 1982. The Court below
denied the Motion to Dismiss in the mentioned case on the
ground that the property involved is located in the Philippines
so that the Divorce Decree has no bearing in the case. The
denial is now the subject of this certiorari proceeding.
Generally, the denial of a Motion to Dismiss in a civil case is
interlocutory and is not subject to appeal. certiorari and
Prohibition are neither the remedies to question the propriety
of an interlocutory order of the trial Court. However, when a
grave abuse of discretion was patently committed, or the lower
Court acted capriciously and whimsically, then it devolves upon
this Court in a certiorari proceeding to exercise its supervisory
authority and to correct the error committed which, in such a
case, is equivalent to lack of jurisdiction. 1 Prohibition would
then lie since it would be useless and a waste of time to go
ahead with the proceedings. 2 We consider the petition filed in
this case within the exception, and we have given it due course.
For resolution is the effect of the foreign divorce on the parties
and their alleged conjugal property in the Philippines.
Petitioner contends that respondent is estopped from laying
claim on the alleged conjugal property because of the
representation he made in the divorce proceedings before the
American Court that they had no community of property; that
the Galleon Shop was not established through conjugal funds,
and that respondent's claim is barred by prior judgment.
For his part, respondent avers that the Divorce Decree issued
by the Nevada Court cannot prevail over the prohibitive laws of
the Philippines and its declared national policy; that the acts
and declaration of a foreign Court cannot, especially if the
same is contrary to public policy, divest Philippine Courts of
jurisdiction to entertain matters within its jurisdiction.
For the resolution of this case, it is not necessary to determine
whether the property relations between petitioner and private
respondent, after their marriage, were upon absolute or
relative community property, upon complete separation of
property, or upon any other regime. The pivotal fact in this case
is the Nevada divorce of the parties.
The Nevada District Court, which decreed the divorce, had
obtained jurisdiction over petitioner who appeared in person
before the Court during the trial of the case. It also obtained
jurisdiction over private respondent who, giving his address as
No. 381 Bush Street, San Francisco, California, authorized his
attorneys in the divorce case, Karp & Gradt Ltd., to agree to the
divorce on the ground of incompatibility in the understanding
that there were neither community property nor community
obligations. 3 As explicitly stated in the Power of Attorney he
executed in favor of the law firm of KARP & GRAD LTD., 336 W.
Liberty, Reno, Nevada, to represent him in the divorce
proceedings:
You are hereby authorized to accept service of Summons, to
file an Answer, appear on my behalf and do any things
necessary and proper to represent me, without further
contesting, subject to the following:
1. That my spouse seeks a divorce on the ground of
incompatibility. 2. That there is no community of property to
be adjudicated by the Court. 3. 'I'hat there are no community
obligations to be adjudicated by the court.
There can be no question as to the validity of that Nevada
divorce in any of the States of the United States. The decree is
binding on private respondent as an American citizen. For
instance, private respondent cannot sue petitioner, as her
husband, in any State of the Union. What he is contending in
this case is that the divorce is not valid and binding in this
jurisdiction, the same being contrary to local law and public
policy.
It is true that owing to the nationality principle embodied in
Article 15 of the Civil Code, 5 only Philippine nationals are
covered by the policy against absolute divorces the same being
considered contrary to our concept of public police and
morality. However, aliens may obtain divorces abroad, which
may be recognized in the Philippines, provided they are valid
according to their national law. 6 In this case, the divorce in
Nevada released private respondent from the marriage from
the standards of American law, under which divorce dissolves
the marriage. As stated by the Federal Supreme Court of the
United States in Atherton vs. Atherton, 45 L. Ed. 794, 799:
The purpose and effect of a decree of divorce from the bond of
matrimony by a court of competent jurisdiction are to change
the existing status or domestic relation of husband and wife,
and to free them both from the bond. The marriage tie when
thus severed as to one party, ceases to bind either. A husband
without a wife, or a wife without a husband, is unknown to the
law. When the law provides, in the nature of a penalty. that the
guilty party shall not marry again, that party, as well as the
other, is still absolutely freed from the bond of the former
marriage.
Thus, pursuant to his national law, private respondent is no
longer the husband of petitioner. He would have no standing to
sue in the case below as petitioner's husband entitled to
exercise control over conjugal assets. As he is bound by the
Decision of his own country's Court, which validly exercised
jurisdiction over him, and whose decision he does not
repudiate, he is estopped by his own representation before said
Court from asserting his right over the alleged conjugal
property.
To maintain, as private respondent does, that, under our laws,
petitioner has to be considered still married to private
respondent and still subject to a wife's obligations under Article
109, et. seq. of the Civil Code cannot be just. Petitioner should
not be obliged to live together with, observe respect and
fidelity, and render support to private respondent. The latter
should not continue to be one of her heirs with possible rights
to conjugal property. She should not be discriminated against
in her own country if the ends of justice are to be served.
PILAIPL VS IBAY-SOMERA
REGALADO, J.:
An ill-starred marriage of a Filipina and a foreigner which ended
in a foreign absolute divorce, only to be followed by a criminal
infidelity suit of the latter against the former, provides Us the
opportunity to lay down a decisional rule on what hitherto
appears to be an unresolved jurisdictional question.
On September 7, 1979, petitioner Imelda Manalaysay Pilapil, a
Filipino citizen, and private respondent Erich Ekkehard Geiling,
a German national, were married before the Registrar of Births,
Marriages and Deaths at Friedensweiler in the Federal Republic
of Germany. The marriage started auspiciously enough, and
the couple lived together for some time in Malate, Manila
where their only child, Isabella Pilapil Geiling, was born on April
20, 1980.
Thereafter, marital discord set in, with mutual recriminations
between the spouses, followed by a separation de facto
between them.
After about three and a half years of marriage, such connubial
disharmony eventuated in private respondent initiating a
divorce proceeding against petitioner in Germany before the
Schoneberg Local Court in January, 1983. He claimed that there
was failure of their marriage and that they had been living apart
since April, 1982.
Petitioner, on the other hand, filed an action for legal
separation, support and separation of property before the
Regional Trial Court of Manila, Branch XXXII, on January 23,
1983 where the same is still pending as Civil Case No. 83-15866.
On January 15, 1986, Division 20 of the Schoneberg Local
Court, Federal Republic of Germany, promulgated a decree of
divorce on the ground of failure of marriage of the spouses. The
custody of the child was granted to petitioner. The records
show that under German law said court was locally and
internationally competent for the divorce proceeding and that
the dissolution of said marriage was legally founded on and
authorized by the applicable law of that foreign jurisdiction.
On June 27, 1986, or more than five months after the issuance
of the divorce decree, private respondent filed two complaints
for adultery before the City Fiscal of Manila alleging that, while
still married to said respondent, petitioner "had an affair with a
certain William Chia as early as 1982 and with yet another man
named Jesus Chua sometime in 1983". Assistant Fiscal Jacinto
A. de los Reyes, Jr., after the corresponding investigation,
recommended the dismissal of the cases on the ground of
insufficiency of evidence. 5 However, upon review, the
respondent city fiscal approved a resolution, dated January 8,
1986, directing the filing of two complaints for adultery against
the petitioner. 6 The complaints were accordingly filed and
were eventually raffled to two branches of the Regional Trial
Court of Manila. The case entitled "People of the Philippines vs.
Imelda Pilapil and William Chia", docketed as Criminal Case No.
87-52435, was assigned to Branch XXVI presided by the
respondent judge; while the other case, "People of the
Philippines vs. Imelda Pilapil and James Chua", docketed as
Criminal Case No. 87-52434 went to the sala of Judge Leonardo
Cruz, Branch XXV, of the same court.
On March 14, 1987, petitioner filed a petition with the Secretary
of Justice asking that the aforesaid resolution of respondent
fiscal be set aside and the cases against her be dismissed. 8 A
similar petition was filed by James Chua, her co-accused in
Criminal Case No. 87-52434. The Secretary of Justice, through
the Chief State Prosecutor, gave due course to both petitions
and directed the respondent city fiscal to inform the
Department of Justice "if the accused have already been
arraigned and if not yet arraigned, to move to defer further
proceedings" and to elevate the entire records of both cases to
his office for review.
Petitioner thereafter filed a motion in both criminal cases to
defer her arraignment and to suspend further proceedings
thereon. 10 As a consequence, Judge Leonardo Cruz suspended
proceedings in Criminal Case No. 87-52434. On the other hand,
respondent judge merely reset the date of the arraignment in
Criminal Case No. 87-52435 to April 6, 1987. Before such
scheduled date, petitioner moved for the cancellation of the
arraignment and for the suspension of proceedings in said
Criminal Case No. 87-52435 until after the resolution of the
petition for review then pending before the Secretary of
Justice. 11 A motion to quash was also filed in the same case on
the ground of lack of jurisdiction, 12 which motion was denied
by the respondent judge in an order dated September 8, 1987.
The same order also directed the arraignment of both accused
therein, that is, petitioner and William Chia. The latter entered
a plea of not guilty while the petitioner refused to be arraigned.
Such refusal of the petitioner being considered by respondent
judge as direct contempt, she and her counsel were fined and
the former was ordered detained until she submitted herself for
arraignment. 13 Later, private respondent entered a plea of not
guilty.
On October 27, 1987, petitioner filed this special civil action for
certiorari and prohibition, with a prayer for a temporary
restraining order, seeking the annulment of the order of the
lower court denying her motion to quash. The petition is
anchored on the main ground that the court is without
jurisdiction "to try and decide the charge of adultery, which is a
private offense that cannot be prosecuted de officio (sic), since
the purported complainant, a foreigner, does not qualify as an
offended spouse having obtained a final divorce decree under
his national law prior to his filing the criminal complaint."
On October 21, 1987, this Court issued a temporary restraining
order enjoining the respondents from implementing the
aforesaid order of September 8, 1987 and from further
proceeding with Criminal Case No. 87-52435. Subsequently, on
March 23, 1988 Secretary of Justice Sedfrey A. Ordoñez acted
on the aforesaid petitions for review and, upholding petitioner's
ratiocinations, issued a resolution directing the respondent city
fiscal to move for the dismissal of the complaints against the
petitioner.
We find this petition meritorious. The writs prayed for shall
accordingly issue.
Under Article 344 of the Revised Penal Code, 17 the crime of
adultery, as well as four other crimes against chastity, cannot
be prosecuted except upon a sworn written complaint filed by
the offended spouse. It has long since been established, with
unwavering consistency, that compliance with this rule is a
jurisdictional, and not merely a formal, requirement. 18 While
in point of strict law the jurisdiction of the court over the
offense is vested in it by the Judiciary Law, the requirement for
a sworn written complaint is just as jurisdictional a mandate
since it is that complaint which starts the prosecutory
proceeding 19 and without which the court cannot exercise its
jurisdiction to try the case.
Now, the law specifically provides that in prosecutions for
adultery and concubinage the person who can legally file the
complaint should be the offended spouse, and nobody else.
Unlike the offenses of seduction, abduction, rape and acts of
lasciviousness, no provision is made for the prosecution of the
crimes of adultery and concubinage by the parents,
grandparents or guardian of the offended party. The so-called
exclusive and successive rule in the prosecution of the first four
offenses above mentioned do not apply to adultery and
concubinage. It is significant that while the State, as parens
patriae, was added and vested by the 1985 Rules of Criminal
Procedure with the power to initiate the criminal action for a
deceased or incapacitated victim in the aforesaid offenses of
seduction, abduction, rape and acts of lasciviousness, in default
of her parents, grandparents or guardian, such amendment did
not include the crimes of adultery and concubinage. In other
words, only the offended spouse, and no other, is authorized by
law to initiate the action therefor.
Corollary to such exclusive grant of power to the offended
spouse to institute the action, it necessarily follows that such
initiator must have the status, capacity or legal representation
to do so at the time of the filing of the criminal action. This is a
familiar and express rule in civil actions; in fact, lack of legal
capacity to sue, as a ground for a motion to dismiss in civil
cases, is determined as of the filing of the complaint or petition.
The absence of an equivalent explicit rule in the prosecution of
criminal cases does not mean that the same requirement and
rationale would not apply. Understandably, it may not have
been found necessary since criminal actions are generally and
fundamentally commenced by the State, through the People of
the Philippines, the offended party being merely the
complaining witness therein. However, in the so-called "private
crimes" or those which cannot be prosecuted de oficio, and the
present prosecution for adultery is of such genre, the offended
spouse assumes a more predominant role since the right to
commence the action, or to refrain therefrom, is a matter
exclusively within his power and option.
This policy was adopted out of consideration for the aggrieved
party who might prefer to suffer the outrage in silence rather
than go through the scandal of a public trial. 20 Hence, as
cogently argued by petitioner, Article 344 of the Revised Penal
Code thus presupposes that the marital relationship is still
subsisting at the time of the institution of the criminal action
for, adultery. This is a logical consequence since the raison
d'etre of said provision of law would be absent where the
supposed offended party had ceased to be the spouse of the
alleged offender at the time of the filing of the criminal case. 21
In these cases, therefore, it is indispensable that the status and
capacity of the complainant to commence the action be
definitely established and, as already demonstrated, such
status or capacity must indubitably exist as of the time he
initiates the action. It would be absurd if his capacity to bring
the action would be determined by his status before or
subsequent to the commencement thereof, where such
capacity or status existed prior to but ceased before, or was
acquired subsequent to but did not exist at the time of, the
institution of the case. We would thereby have the anomalous
spectacle of a party bringing suit at the very time when he is
without the legal capacity to do so.
To repeat, there does not appear to be any local precedential
jurisprudence on the specific issue as to when precisely the
status of a complainant as an offended spouse must exist
where a criminal prosecution can be commenced only by one
who in law can be categorized as possessed of such status.
Stated differently and with reference to the present case, the
inquiry; would be whether it is necessary in the
commencement of a criminal action for adultery that the
marital bonds between the complainant and the accused be
unsevered and existing at the time of the institution of the
action by the former against the latter.
American jurisprudence, on cases involving statutes in that
jurisdiction which are in pari materia with ours, yields the rule
that after a divorce has been decreed, the innocent spouse no
longer has the right to institute proceedings against the
offenders where the statute provides that the innocent spouse
shall have the exclusive right to institute a prosecution for
adultery. Where, however, proceedings have been properly
commenced, a divorce subsequently granted can have no legal
effect on the prosecution of the criminal proceedings to a
conclusion.
In the cited Loftus case, the Supreme Court of Iowa held that —
'No prosecution for adultery can be commenced except on the
complaint of the husband or wife.' Section 4932, Code. Though
Loftus was husband of defendant when the offense is said to
have been committed, he had ceased to be such when the
prosecution was begun; and appellant insists that his status
was not such as to entitle him to make the complaint. We have
repeatedly said that the offense is against the unoffending
spouse, as well as the state, in explaining the reason for this
provision in the statute; and we are of the opinion that the
unoffending spouse must be such when the prosecution is
commenced.
We see no reason why the same doctrinal rule should not apply
in this case and in our jurisdiction, considering our statutory law
and jural policy on the matter. We are convinced that in cases
of such nature, the status of the complainant vis-a-vis the
accused must be determined as of the time the complaint was
filed. Thus, the person who initiates the adultery case must be
an offended spouse, and by this is meant that he is still married
to the accused spouse, at the time of the filing of the
complaint.
In the present case, the fact that private respondent obtained a
valid divorce in his country, the Federal Republic of Germany, is
admitted. Said divorce and its legal effects may be recognized
in the Philippines insofar as private respondent is concerned 23
in view of the nationality principle in our civil law on the matter
of status of persons.
Thus, in the recent case of Van Dorn vs. Romillo, Jr., et al., 24
after a divorce was granted by a United States court between
Alice Van Dornja Filipina, and her American husband, the latter
filed a civil case in a trial court here alleging that her business
concern was conjugal property and praying that she be ordered
to render an accounting and that the plaintiff be granted the
right to manage the business. Rejecting his pretensions, this
Court perspicuously demonstrated the error of such stance,
thus:
There can be no question as to the validity of that Nevada
divorce in any of the States of the United States. The decree is
binding on private respondent as an American citizen. For
instance, private respondent cannot sue petitioner, as her
husband, in any State of the Union. ...
It is true that owing to the nationality principle embodied in
Article 15 of the Civil Code, only Philippine nationals are
covered by the policy against absolute divorces the same being
considered contrary to our concept of public policy and
morality. However, aliens may obtain divorces abroad, which
may be recognized in the Philippines, provided they are valid
according to their national law. ...
Thus, pursuant to his national law, private respondent is no
longer the husband of petitioner. He would have no standing to
sue in the case below as petitioner's husband entitled to
exercise control over conjugal assets.
Under the same considerations and rationale, private
respondent, being no longer the husband of petitioner, had no
legal standing to commence the adultery case under the
imposture that he was the offended spouse at the time he filed
suit.
The allegation of private respondent that he could not have
brought this case before the decree of divorce for lack of
knowledge, even if true, is of no legal significance or
consequence in this case. When said respondent initiated the
divorce proceeding, he obviously knew that there would no
longer be a family nor marriage vows to protect once a
dissolution of the marriage is decreed. Neither would there be a
danger of introducing spurious heirs into the family, which is
said to be one of the reasons for the particular formulation of
our law on adultery, 26 since there would thenceforth be no
spousal relationship to speak of. The severance of the marital
bond had the effect of dissociating the former spouses from
each other, hence the actuations of one would not affect or
cast obloquy on the other.
The aforecited case of United States vs. Mata cannot be
successfully relied upon by private respondent. In applying
Article 433 of the old Penal Code, substantially the same as
Article 333 of the Revised Penal Code, which punished adultery
"although the marriage be afterwards declared void", the Court
merely stated that "the lawmakers intended to declare
adulterous the infidelity of a married woman to her marital
vows, even though it should be made to appear that she is
entitled to have her marriage contract declared null and void,
until and unless she actually secures a formal judicial
declaration to that effect". Definitely, it cannot be logically
inferred therefrom that the complaint can still be filed after the
declaration of nullity because such declaration that the
marriage is void ab initio is equivalent to stating that it never
existed. There being no marriage from the beginning, any
complaint for adultery filed after said declaration of nullity
would no longer have a leg to stand on. Moreover, what was
consequently contemplated and within the purview of the
decision in said case is the situation where the criminal action
for adultery was filed before the termination of the marriage by
a judicial declaration of its nullity ab initio. The same rule and
requisite would necessarily apply where the termination of the
marriage was effected, as in this case, by a valid foreign
divorce.

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

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

WHEREFORE, the questioned order denying petitioner's

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

SO ORDERED.

RECIO VS RECIO

PANGANIBAN, J.:

A divorce obtained abroad by an alien may be recognized in our

jurisdiction, provided such decree is valid according to the
national law of the foreigner. However, the divorce decree and
the governing personal law of the alien spouse who obtained
the divorce must be proven. Our courts do not take judicial
notice of foreign laws and judgment; hence, like any other
facts, both the divorce decree and the national law of the alien
must be alleged and proven according to our law on evidence.
The Facts
Rederick A. Recio, a Filipino, was married to Editha Samson, an
Australian citizen, in Malabon, Rizal, on March 1, 1987.4 They
lived together as husband and wife in Australia. On May 18,
1989,5 a decree of divorce, purportedly dissolving the
marriage, was issued by an Australian family court.
On June 26, 1992, respondent became an Australian citizen, as
shown by a "Certificate of Australian Citizenship" issued by the
Australian government.6 Petitioner – a Filipina – and
respondent were married on January 12, 1994 in Our Lady of
Perpetual Help Church in Cabanatuan City.7 In their application
for a marriage license, respondent was declared as "single" and
"Filipino."8
Starting October 22, 1995, petitioner and respondent lived
separately without prior judicial dissolution of their marriage.
While the two were still in Australia, their conjugal assets were
divided on May 16, 1996, in accordance with their Statutory
Declarations secured in Australia.9
On March 3, 1998, petitioner filed a Complaint for Declaration
of Nullity of Marriage10 in the court a quo, on the ground of
bigamy – respondent allegedly had a prior subsisting marriage
at the time he married her on January 12, 1994. She claimed
that she learned of respondent's marriage to Editha Samson
only in November, 1997.
In his Answer, respondent averred that, as far back as 1993, he
had revealed to petitioner his prior marriage and its subsequent
dissolution.11 He contended that his first marriage to an
Australian citizen had been validly dissolved by a divorce
decree obtained in Australian in 1989;12 thus, he was legally
capacitated to marry petitioner in 1994.
On July 7, 1998 – or about five years after the couple's wedding
and while the suit for the declaration of nullity was pending –
respondent was able to secure a divorce decree from a family
court in Sydney, Australia because the "marriage ha[d]
irretrievably broken down."13
Respondent prayed in his Answer that the Complained be
dismissed on the ground that it stated no cause of action.14
The Office of the Solicitor General agreed with respondent.15
The court marked and admitted the documentary evidence of
both parties.16 After they submitted their respective
memoranda, the case was submitted for resolution.17
Thereafter, the trial court rendered the assailed Decision and
Order.
Ruling of the Trial Court
The trial court declared the marriage dissolved on the ground
that the divorce issued in Australia was valid and recognized in
the Philippines. It deemed the marriage ended, but not on the
basis of any defect in an essential element of the marriage; that
is, respondent's alleged lack of legal capacity to remarry.
Rather, it based its Decision on the divorce decree obtained by
respondent. The Australian divorce had ended the marriage;
thus, there was no more martial union to nullify or annual.
Hence, this Petition.18
Issues
Petitioner submits the following issues for our consideration:
"I
The trial court gravely erred in finding that the divorce decree
obtained in Australia by the respondent ipso facto terminated
his first marriage to Editha Samson thereby capacitating him to
contract a second marriage with the petitioner.
"2
The failure of the respondent, who is now a naturalized
Australian, to present a certificate of legal capacity to marry
constitutes absence of a substantial requisite voiding the
petitioner' marriage to the respondent.
"3
The trial court seriously erred in the application of Art. 26 of the
Family Code in this case.
"4
The trial court patently and grievously erred in disregarding
Arts. 11, 13, 21, 35, 40, 52 and 53 of the Family Code as the
applicable provisions in this case.
"5
The trial court gravely erred in pronouncing that the divorce
gravely erred in pronouncing that the divorce decree obtained
by the respondent in Australia ipso facto capacitated the
parties to remarry, without first securing a recognition of the
judgment granting the divorce decree before our courts."19
The Petition raises five issues, but for purposes of this Decision,
we shall concentrate on two pivotal ones: (1) whether the
divorce between respondent and Editha Samson was proven,
and (2) whether respondent was proven to be legally
capacitated to marry petitioner. Because of our ruling on these
two, there is no more necessity to take up the rest.
The Court's Ruling
The Petition is partly meritorious.
First Issue:
Proving the Divorce Between Respondent and Editha Samson
Petitioner assails the trial court's recognition of the divorce
between respondent and Editha Samson. Citing Adong v.
Cheong Seng Gee,20 petitioner argues that the divorce decree,
like any other foreign judgment, may be given recognition in
this jurisdiction only upon proof of the existence of (1) the
foreign law allowing absolute divorce and (2) the alleged
divorce decree itself. She adds that respondent miserably failed
to establish these elements.
Petitioner adds that, based on the first paragraph of Article 26
of the Family Code, marriages solemnized abroad are governed
by the law of the place where they were celebrated (the lex loci
celebrationist). In effect, the Code requires the presentation of
the foreign law to show the conformity of the marriage in
question to the legal requirements of the place where the
marriage was performed.
At the outset, we lay the following basic legal principles as the
take-off points for our discussion. Philippine law does not
provide for absolute divorce; hence, our courts cannot grant
it.21 A marriage between two Filipinos cannot be dissolved
even by a divorce obtained abroad, because of Articles 1522
and 1723 of the Civil Code.24 In mixed marriages involving a
Filipino and a foreigner, Article 2625 of the Family Code allows
the former to contract a subsequent marriage in case the
divorce is "validly obtained abroad by the alien spouse
capacitating him or her to remarry."26 A divorce obtained
abroad by a couple, who are both aliens, may be recognized in
the Philippines, provided it is consistent with their respective
national laws.27
A comparison between marriage and divorce, as far as pleading
and proof are concerned, can be made. Van Dorn v. Romillo Jr.
decrees that "aliens may obtain divorces abroad, which may be
recognized in the Philippines, provided they are valid according
to their national law."28 Therefore, before a foreign divorce
decree can be recognized by our courts, the party pleading it
must prove the divorce as a fact and demonstrate its
conformity to the foreign law allowing it.29 Presentation solely
of the divorce decree is insufficient.
Divorce as a Question of Fact
Petitioner insists that before a divorce decree can be admitted
in evidence, it must first comply with the registration
requirements under Articles 11, 13 and 52 of the Family Code.
These articles read as follows:
"ART. 11. Where a marriage license is required, each of the
contracting parties shall file separately a sworn application for
such license with the proper local civil registrar which shall
specify the following:
"(5) If previously married, how, when and where the previous
marriage was dissolved or annulled;
"ART. 13. In case either of the contracting parties has been
previously married, the applicant shall be required to furnish,
instead of the birth of baptismal certificate required in the last
preceding article, the death certificate of the deceased spouse
or the judicial decree of annulment or declaration of nullity of
his or her previous marriage. x x x.
"ART. 52. The judgment of annulment or of absolute nullity of
the marriage, the partition and distribution of the properties of
the spouses, and the delivery of the children's presumptive
legitimes shall be recorded in the appropriate civil registry and
registries of property; otherwise, the same shall not affect their
persons."
Respondent, on the other hand, argues that the Australian
divorce decree is a public document – a written official act of an
Australian family court. Therefore, it requires no further proof
of its authenticity and due execution.
Respondent is getting ahead of himself. Before a foreign
judgment is given presumptive evidentiary value, the
document must first be presented and admitted in evidence.30
A divorce obtained abroad is proven by the divorce decree
itself. Indeed the best evidence of a judgment is the judgment
itself.31 The decree purports to be a written act or record of an
act of an officially body or tribunal of a foreign country.32
Under Sections 24 and 25 of Rule 132, on the other hand, a
writing or document may be proven as a public or official record
of a foreign country by either (1) an official publication or (2) a
copy thereof attested33 by the officer having legal custody of
the document. If the record is not kept in the Philippines, such
copy must be (a) accompanied by a certificate issued by the
proper diplomatic or consular officer in the Philippine foreign
service stationed in the foreign country in which the record is
kept and (b) authenticated by the seal of his office.34
The divorce decree between respondent and Editha Samson
appears to be an authentic one issued by an Australian family
court.35 However, appearance is not sufficient; compliance
with the aforemetioned rules on evidence must be
demonstrated.
Fortunately for respondent's cause, when the divorce decree of
May 18, 1989 was submitted in evidence, counsel for petitioner
objected, not to its admissibility, but only to the fact that it had
not been registered in the Local Civil Registry of Cabanatuan
City.36 The trial court ruled that it was admissible, subject to
petitioner's qualification.37 Hence, it was admitted in evidence
and accorded weight by the judge. Indeed, petitioner's failure
to object properly rendered the divorce decree admissible as a
written act of the Family Court of Sydney, Australia.38
Compliance with the quoted articles (11, 13 and 52) of the
Family Code is not necessary; respondent was no longer bound
by Philippine personal laws after he acquired Australian
citizenship in 1992.39 Naturalization is the legal act of adopting
an alien and clothing him with the political and civil rights
belonging to a citizen.40 Naturalized citizens, freed from the
protective cloak of their former states, don the attires of their
adoptive countries. By becoming an Australian, respondent
severed his allegiance to the Philippines and the vinculum juris
that had tied him to Philippine personal laws.
Burden of Proving Australian Law
Respondent contends that the burden to prove Australian
divorce law falls upon petitioner, because she is the party
challenging the validity of a foreign judgment. He contends
that petitioner was satisfied with the original of the divorce
decree and was cognizant of the marital laws of Australia,
because she had lived and worked in that country for quite a
long time. Besides, the Australian divorce law is allegedly
known by Philippine courts: thus, judges may take judicial
notice of foreign laws in the exercise of sound discretion.
We are not persuaded. The burden of proof lies with "the party
who alleges the existence of a fact or thing necessary in the
prosecution or defense of an action."41 In civil cases, plaintiffs
have the burden of proving the material allegations of the
complaint when those are denied by the answer; and
defendants have the burden of proving the material allegations
in their answer when they introduce new matters.42 Since the
divorce was a defense raised by respondent, the burden of
proving the pertinent Australian law validating it falls squarely
upon him.
It is well-settled in our jurisdiction that our courts cannot take
judicial notice of foreign laws.43 Like any other facts, they must
be alleged and proved. Australian marital laws are not among
those matters that judges are supposed to know by reason of
their judicial function.44 The power of judicial notice must be
exercised with caution, and every reasonable doubt upon the
subject should be resolved in the negative.
Second Issue:
Respondent's Legal Capacity to Remarry
Petitioner contends that, in view of the insufficient proof of the
divorce, respondent was legally incapacitated to marry her in
1994.
Hence, she concludes that their marriage was void ab initio.
Respondent replies that the Australian divorce decree, which
was validly admitted in evidence, adequately established his
legal capacity to marry under Australian law.
Respondent's contention is untenable. In its strict legal sense,
divorce means the legal dissolution of a lawful union for a cause
arising after marriage. But divorces are of different types. The
two basic ones are (1) absolute divorce or a vinculo matrimonii
and (2) limited divorce or a mensa et thoro. The first kind
terminates the marriage, while the second suspends it and
leaves the bond in full force.45 There is no showing in the case
at bar which type of divorce was procured by respondent.
Respondent presented a decree nisi or an interlocutory decree
– a conditional or provisional judgment of divorce. It is in effect
the same as a separation from bed and board, although an
absolute divorce may follow after the lapse of the prescribed
period during which no reconciliation is effected.
Even after the divorce becomes absolute, the court may under
some foreign statutes and practices, still restrict remarriage.
Under some other jurisdictions, remarriage may be limited by
statute; thus, the guilty party in a divorce which was granted on
the ground of adultery may be prohibited from remarrying
again. The court may allow a remarriage only after proof of
good behavior.47
On its face, the herein Australian divorce decree contains a
restriction that reads:
"1. A party to a marriage who marries again before this decree
becomes absolute (unless the other party has died) commits
the offence of bigamy."48
This quotation bolsters our contention that the divorce
obtained by respondent may have been restricted. It did not
absolutely establish his legal capacity to remarry according to
his national law. Hence, we find no basis for the ruling of the
trial court, which erroneously assumed that the Australian
divorce ipso facto restored respondent's capacity to remarry
despite the paucity of evidence on this matter.
We also reject the claim of respondent that the divorce decree
raises a disputable presumption or presumptive evidence as to
his civil status based on Section 48, Rule 3949 of the Rules of
Court, for the simple reason that no proof has been presented
on the legal effects of the divorce decree obtained under
Australian laws.
Significance of the Certificate of Legal Capacity
Petitioner argues that the certificate of legal capacity required
by Article 21 of the Family Code was not submitted together
with the application for a marriage license. According to her, its
absence is proof that respondent did not have legal capacity to
remarry.
We clarify. To repeat, the legal capacity to contract marriage is
determined by the national law of the party concerned. The
certificate mentioned in Article 21 of the Family Code would
have been sufficient to establish the legal capacity of
respondent, had he duly presented it in court. A duly
authenticated and admitted certificate is prima facie evidence
of legal capacity to marry on the part of the alien applicant for a
marriage license.50
As it is, however, there is absolutely no evidence that proves
respondent's legal capacity to marry petitioner. A review of the
records before this Court shows that only the following exhibits
were presented before the lower court: (1) for petitioner: (a)
Exhibit "A" – Complaint;51 (b) Exhibit "B" – Certificate of
Marriage Between Rederick A. Recto (Filipino-Australian) and
Grace J. Garcia (Filipino) on January 12, 1994 in Cabanatuan
City, Nueva Ecija;52 (c) Exhibit "C" – Certificate of Marriage
Between Rederick A. Recio (Filipino) and Editha D. Samson
(Australian) on March 1, 1987 in Malabon, Metro Manila;53 (d)
Exhibit "D" – Office of the City Registrar of Cabanatuan City
Certification that no information of annulment between
Rederick A. Recto and Editha D. Samson was in its records;54
and (e) Exhibit "E" – Certificate of Australian Citizenship of
Rederick A. Recto;55 (2) for respondent: (Exhibit "1" –
Amended Answer;56 (b) Exhibit "S" – Family Law Act 1975
Decree Nisi of Dissolution of Marriage in the Family Court of
Australia;57 (c) Exhibit "3" – Certificate of Australian Citizenship
of Rederick A. Recto;58 (d) Exhibit "4" – Decree Nisi of
Dissolution of Marriage in the Family Court of Australia
Certificate;59 and Exhibit "5" – Statutory Declaration of the
Legal Separation Between Rederick A. Recto and Grace J.
Garcia Recio since October 22, 1995.60
Based on the above records, we cannot conclude that
respondent, who was then a naturalized Australian citizen, was
legally capacitated to marry petitioner on January 12, 1994. We
agree with petitioner's contention that the court a quo erred in
finding that the divorce decree ipso facto clothed respondent
with the legal capacity to remarry without requiring him to
adduce sufficient evidence to show the Australian personal law
governing his status; or at the very least, to prove his legal
capacity to contract the second marriage.
Neither can we grant petitioner's prayer to declare her
marriage to respondent null and void on the ground of bigamy.
After all, it may turn out that under Australian law, he was
really capacitated to marry petitioner as a direct result of the
divorce decree. Hence, we believe that the most judicious
course is to remand this case to the trial court to receive
evidence, if any, which show petitioner's legal capacity to
marry petitioner. Failing in that, then the court a quo may
declare a nullity of the parties' marriage on the ground of
bigamy, there being already in evidence two existing marriage
certificates, which were both obtained in the Philippines, one in
Malabon, Metro Manila dated March 1, 1987 and the other, in
Cabanatuan City dated January 12, 1994.
WHEREFORE, in the interest of orderly procedure and
substantial justice, we REMAND the case to the court a quo for
the purpose of receiving evidence which conclusively show
respondent's legal capacity to marry petitioner; and failing in QUITA VS CA
that, of declaring the parties' marriage void on the ground of
bigamy, as above discussed. No costs. BELLOSILLO, J.:
SO ORDERED. FE D. QUITA and Arturo T. Padlan, both Filipinos, were married
in the Philippines on 18 May 1941. They were not however
blessed with children. Somewhere along the way their
relationship soured. Eventually Fe sued Arturo for divorce in
San Francisco, California, U.S.A. She submitted in the divorce
proceedings a private writing dated 19 July 1950 evidencing
their agreement to live separately from each other and a
settlement of their conjugal properties. On 23 July 1954 she
obtained a final judgment of divorce. Three (3) weeks
thereafter she married a certain Felix Tupaz in the same locality
but their relationship also ended in a divorce. Still in the U.S.A.,
she married for the third time, to a certain Wernimont.
On 16 April 1972 Arturo died. He left no will. On 31 August 1972
Lino Javier Inciong filed a petition with the Regional Trial Court
of Quezon City for issuance of letters of administration
concerning the estate of Arturo in favor of the Philippine Trust
Company. Respondent Blandina Dandan (also referred to as
Blandina Padlan), claiming to be the surviving spouse of Arturo
Padlan, and Claro, Alexis, Ricardo, Emmanuel, Zenaida and
Yolanda, all surnamed Padlan, named in the children of Arturo
Padlan opposed the petition and prayed for the appointment
instead of Atty. Leonardo Casaba, which was resolved in favor
of the latter. Upon motion of the oppositors themselves, Atty.
Cabasal was later replaced by Higino Castillon. On 30 April 1973
the oppositors (Blandina and Padlan children) submitted
certified photocopies of the 19 July 1950 private writing and the
final judgment of divorce between petitioner and Arturo. Later
Ruperto T. Padlan, claiming to be the sole surviving brother of
the deceased Arturo, intervened.
On 7 October 1987 petitioner moved for the immediate
declaration of heirs of the decedent and the distribution of his
estate. At the scheduled hearing on 23 October 1987, private
respondent as well as the six (6) Padlan children and Ruperto
failed to appear despite due notice. On the same day, the trial
court required the submission of the records of birth of the
Padlan children within ten (10) days from receipt thereof, after
which, with or without the documents, the issue on the
declaration of heirs would be considered submitted for
resolution. The prescribed period lapsed without the required
documents being submitted.
The trial court invoking Tenchavez v. Escaño 1 which held that
"a foreign divorce between Filipino citizens sought and decreed
after the effectivity of the present Civil Code (Rep. Act 386) was
not entitled to recognition as valid in this jurisdiction," 2
disregarded the divorce between petitioner and Arturo.
Consecuently, it expressed the view that their marriage
subsisted until the death of Arturo in 1972. Neither did it
consider valid their extrajudicial settlement of conjugal
properties due to lack of judicial approval. 3 On the other hand,
it opined that there was no showing that marriage existed
between private respondent and Arturo, much less was it
shown that the alleged Padlan children had been
acknowledged by the deceased as his children with her. As
regards Ruperto, it found that he was a brother of Arturo. On 27
November 1987 4 only petitioner and Ruperto were declared
the intestate heirs of Arturo. Accordingly, equal adjudication of
the net hereditary estate was ordered in favor of the two
intestate heirs. 5
On motion for reconsideration, Blandina and the Padlan
children were allowed to present proofs that the recognition of
the children by the deceased as his legitimate children, except
Alexis who was recognized as his illegitimate child, had been
made in their respective records of birth. Thus on 15 February
1988 6 partial reconsideration was granted declaring the
Padlan children, with the exception of Alexis, entitled to one-
half of the estate to the exclusion of Ruperto Padlan, and
petitioner to the other half. 7 Private respondent was not
declared an heir. Although it was stated in the aforementioned
records of birth that she and Arturo were married on 22 April
1947, their marriage was clearly void since it was celebrated
during the existence of his previous marriage to petitioner.
In their appeal to the Court of Appeals, Blandina and her
children assigned as one of the errors allegedly committed by
the trial court the circumstance that the case was decided
without a hearing, in violation of Sec. 1, Rule 90, of the Rules of
Court, which provides that if there is a controversy before the
court as to who are the lawful heirs of the deceased person or
as to the distributive shares to which each person is entitled
under the law, the controversy shall be heard and decided as in
ordinary cases.
Respondent appellate court found this ground alone sufficient
to sustain the appeal; hence, on 11 September 1995 it declared
null and void the 27 November 1987 decision and 15 February
1988 order of the trial court, and directed the remand of the
case to the trial court for further proceedings. 8 On 18 April
1996 it denied reconsideration. 9
Should this case be remanded to the lower court for further
proceedings? Petitioner insists that there is no need because,
first, no legal or factual issue obtains for resolution either as to
the heirship of the Padlan children or as to the decedent; and,
second, the issue as to who between petitioner and private
respondent is the proper hier of the decedent is one of law
which can be resolved in the present petition based on
establish facts and admissions of the parties.
We cannot sustain petitioner. The provision relied upon by
respondent court is clear: If there is a controversy before the
court as to who are the lawful heirs of the deceased person or
as to the distributive shares to which each person is entitled
under the law, the controversy shall be heard and decided as in
ordinary cases.
We agree with petitioner that no dispute exists either as to the
right of the six (6) Padlan children to inherit from the decedent
because there are proofs that they have been duly
acknowledged by him and petitioner herself even recognizes
them as heirs of Arturo Padlan; 10 nor as to their respective
hereditary shares. But controversy remains as to who is the
legitimate surviving spouse of Arturo. The trial court, after the
parties other than petitioner failed to appear during the
scheduled hearing on 23 October 1987 of the motion for
immediate declaration of heirs and distribution of estate,
simply issued an order requiring the submission of the records
of birth of the Padlan children within ten (10) days from receipt
thereof, after which, with or without the documents, the issue
on declaration of heirs would be deemed submitted for
resolution.
We note that in her comment to petitioner's motion private
respondent raised, among others, the issue as to whether
petitioner was still entitled to inherit from the decedent
considering that she had secured a divorce in the U.S.A. and in
fact had twice remarried. She also invoked the above quoted
procedural rule. 11 To this, petitioner replied that Arturo was a
Filipino and as such remained legally married to her in spite of
the divorce they obtained. 12 Reading between the lines, the
implication is that petitioner was no longer a Filipino citizen at
the time of her divorce from Arturo. This should have prompted
the trial court to conduct a hearing to establish her citizenship.
The purpose of a hearing is to ascertain the truth of the matters
in issue with the aid of documentary and testimonial evidence
as well as the arguments of the parties either supporting or
opposing the evidence. Instead, the lower court perfunctorily
settled her claim in her favor by merely applying the ruling in
Tenchavez v. Escaño.
Then in private respondent's motion to set aside and/or
reconsider the lower court's decision she stressed that the
citizenship of petitioner was relevant in the light of the ruling in
Van Dorn v. Romillo Jr. 13 that aliens may obtain divorces
abroad, which may be recognized in the Philippines, provided
they are valid according to their national law. She prayed
therefore that the case be set for hearing. 14 Petitioner
opposed the motion but failed to squarely address the issue on
her citizenship. 15 The trial court did not grant private
respondent's prayer for a hearing but proceeded to resolve her
motion with the finding that both petitioner and Arturo were
"Filipino citizens and were married in the Philippines." 16 It
maintained that their divorce obtained in 1954 in San Francisco,
California, U.S.A., was not valid in Philippine jurisdiction. We
deduce that the finding on their citizenship pertained solely to
the time of their marriage as the trial court was not supplied
with a basis to determine petitioner's citizenship at the time of
their divorce. The doubt persisted as to whether she was still a
Filipino citizen when their divorce was decreed. The trial court
must have overlooked the materiality of this aspect. Once
proved that she was no longer a Filipino citizen at the time of
their divorce, Van Dorn would become applicable and
petitioner could very well lose her right to inherit from Arturo.
Respondent again raised in her appeal the issue on petitioner's
citizenship; 17 it did not merit enlightenment however from
petitioner. 18 In the present proceeding, petitioner's citizenship
is brought anew to the fore by private respondent. She even
furnishes the Court with the transcript of stenographic notes
taken on 5 May 1995 during the hearing for the reconstitution
of the original of a certain transfer certificate title as well as the
issuance of new owner's duplicate copy thereof before another
trial court. When asked whether she was an American citizen
petitioner answered that she was since 1954. 19 Significantly,
the decree of divorce of petitioner and Arturo was obtained in
the same year. Petitioner however did not bother to file a reply
memorandum to erase the uncertainty about her citizenship at
the time of their divorce, a factual issue requiring hearings to
be conducted by the trial court. Consequently, respondent
appellate court did not err in ordering the case returned to the
trial court for further proceedings.
WHEREFORE, the petition is DENIED. The decision of
respondent Court of Appeals ordering the remand of the case
to the court of origin for further proceedings and declaring null
and void its decision holding petitioner Fe D. Quita and Ruperto
T. Padlan as intestate heirs is AFFIRMED. The order of the
appellate court modifying its previous decision by granting
one-half (1/2) of the net hereditary estate to the Padlan
children, namely, Claro, Ricardo, Emmanuel, Zenaida and
Yolanda, with the exception of Alexis, all surnamed Padlan,
instead of Arturo's brother Ruperto Padlan, is likewise
AFFIRMED. The Court however emphasizes that the reception
of evidence by the trial court should he limited to the
hereditary rights of petitioner as the surviving spouse of Arturo
Padlan.
The motion to declare petitioner and her counsel in contempt
of court and to dismiss the present petition for forum shopping
is DENIED.
SO ORDERED.

We emphasize however that the question to be determined by

the trial court should be limited only to the right of petitioner to
inherit from Arturo as his surviving spouse. Private
respondent's claim to heirship was already resolved by the trial
court. She and Arturo were married on 22 April 1947 while the
prior marriage of petitioner and Arturo was subsisting thereby
resulting in a bigamous marriage considered void from the
beginning under Arts. 80 and 83 of the Civil Code.
Consequently, she is not a surviving spouse that can inherit
from him as this status presupposes a legitimate relationship.
20
ELMAR PEREZ VS CA
As regards the motion of private respondent for petitioner and
a her counsel to be declared in contempt of court and that the YNARES-SANTIAGO, J.:
present petition be dismissed for forum shopping, 21 the same
lacks merit. For forum shopping to exist the actions must This petition for certiorari and prohibition under Rule 65 of the
involve the same transactions and same essential facts and Rules of Court assails the July 25, 2003 Decision1 of the Court of
circumstances. There must also be identical causes of action, Appeals in CA-G.R. SP No. 74456 which set aside and declared
subject matter and issue. 22 The present petition deals with as null and void the September 30, 2002 Order2 of the Regional
declaration of heirship while the subsequent petitions filed Trial Court of Quezon City, Branch 84, granting petitioner’s
before the three (3) trial courts concern the issuance of new motion for leave to file intervention and admitting the
owner's duplicate copies of titles of certain properties Complaint-in-Intervention3 in Civil Case No. Q-01-44847; and
belonging to the estate of Arturo. Obviously, there is no reason its January 23, 2004 Resolution4 denying the motion for
to declare the existence of forum shopping. reconsideration.
Private respondent Tristan A. Catindig married Lily Gomez
Catindig5 twice on May 16, 1968. The first marriage ceremony
was celebrated at the Central Methodist Church at T.M. Kalaw
Street, Ermita, Manila while the second took place at the
Lourdes Catholic Church in La Loma, Quezon City. The
marriage produced four children.
Several years later, the couple encountered marital problems
that they decided to separate from each other. Upon advice of
a mutual friend, they decided to obtain a divorce from the
Dominican Republic. Thus, on April 27, 1984, Tristan and Lily
executed a Special Power of Attorney addressed to the Judge
of the First Civil Court of San Cristobal, Dominican Republic,
appointing an attorney-in-fact to institute a divorce action
under its laws.6
Thereafter, on April 30, 1984, the private respondents filed a
joint petition for dissolution of conjugal partnership with the
Regional Trial Court of Makati. On June 12, 1984, the civil court
in the Dominican Republic ratified the divorce by mutual
consent of Tristan and Lily. Subsequently, on June 23, 1984, the
Regional Trial Court of Makati City, Branch 133, ordered the
complete separation of properties between Tristan and Lily.
On July 14, 1984, Tristan married petitioner Elmar O. Perez in
the State of Virginia in the United States7 and both lived as
husband and wife until October 2001. Their union produced
one offspring.8
During their cohabitation, petitioner learned that the divorce
decree issued by the court in the Dominican Republic which
"dissolved" the marriage between Tristan and Lily was not
recognized in the Philippines and that her marriage to Tristan
was deemed void under Philippine law. When she confronted
Tristan about this, the latter assured her that he would legalize
their union after he obtains an annulment of his marriage with
Lily. Tristan further promised the petitioner that he would
adopt their son so that he would be entitled to an equal share in
his estate as that of each of his children with Lily.9
On August 13, 2001, Tristan filed a petition for the declaration
of nullity of his marriage to Lily with the Regional Trial Court of
Quezon City, docketed as Case No. Q-01-44847.
Subsequently, petitioner filed a Motion for Leave to File
Intervention10 claiming that she has a legal interest in the
matter in litigation because she knows certain information
which might aid the trial court at a truthful, fair and just
adjudication of the annulment case, which the trial court
granted on September 30, 2002. Petitioner’s complaint-in-
intervention was also ordered admitted.
Tristan filed a petition for certiorari and prohibition with the
Court of Appeals seeking to annul the order dated September
30, 2002 of the trial court. The Court of Appeals granted the
petition and declared as null and void the September 30, 2002
Order of the trial court granting the motion for leave to file
intervention and admitting the complaint-in-intervention.
Petitioner’s motion for reconsideration was denied, hence this
petition for certiorari and prohibition filed under Rule 65 of the
Rules of Court. Petitioner contends that the Court of Appeals
gravely abused its discretion in disregarding her legal interest in
the annulment case between Tristan and Lily.
The petition lacks merit.
Ordinarily, the proper recourse of an aggrieved party from a
decision of the Court of Appeals is a petition for review on
certiorari under Rule 45 of the Rules of Court. However, if the
error subject of the recourse is one of jurisdiction, or the act
complained of was granted by a court with grave abuse of
discretion amounting to lack or excess of jurisdiction, as alleged
in this case, the proper remedy is a petition for certiorari under
Rule 65 of the said Rules.11 This is based on the premise that in
issuing the assailed decision and resolution, the Court of
Appeals acted with grave abuse of discretion, amounting to
excess of lack of jurisdiction and there is no plain, speedy and
adequate remedy in the ordinary course of law. A remedy is
considered plain, speedy, and adequate if it will promptly
relieve the petitioner from the injurious effect of the judgment
and the acts of the lower court.12
It is therefore incumbent upon the petitioner to establish that
the Court of Appeals acted with grave abuse of discretion
amounting to excess or lack of jurisdiction when it promulgated
the assailed decision and resolution.
We have previously ruled that grave abuse of discretion may
arise when a lower court or tribunal violates or contravenes the
Constitution, the law or existing jurisprudence. By grave abuse
of discretion is meant, such capricious and whimsical exercise
of judgment as is equivalent to lack of jurisdiction. The abuse of
discretion must be grave as where the power is exercised in an
arbitrary or despotic manner by reason of passion or personal
hostility and must be so patent and gross as to amount to an
evasion of positive duty or to a virtual refusal to perform the
duty enjoined by or to act at all in contemplation of law.13 The
word "capricious," usually used in tandem with the term
"arbitrary," conveys the notion of willful and unreasoning
action. Thus, when seeking the corrective hand of certiorari, a
clear showing of caprice and arbitrariness in the exercise of
discretion is imperative.14
The Rules of Court laid down the parameters before a person,
not a party to a case can intervene, thus:
Who may intervene. — A person who has a legal interest in the
matter in litigation, or in the success of either of the parties, or
an interest against both, or is so situated as to be adversely
affected by a distribution or other disposition of property in the
custody of the court or of an officer thereof may, with leave of
court, be allowed to intervene in the action. The court shall
consider whether or not the intervention will unduly delay or
prejudice the adjudication of the rights of the original parties,
and whether or not the intervenor’s rights may be fully
protected in a separate proceeding.15
The requirements for intervention are: [a] legal interest in the
matter in litigation; and [b] consideration must be given as to
whether the adjudication of the original parties may be delayed
or prejudiced, or whether the intervenor’s rights may be
protected in a separate proceeding or not.16
Legal interest, which entitles a person to intervene, must be in
the matter in litigation and of such direct and immediate
character that the intervenor will either gain or lose by direct
legal operation and effect of the judgment.17 Such interest
must be actual, direct and material, and not simply contingent
and expectant.18
Petitioner claims that her status as the wife and companion of
Tristan for 17 years vests her with the requisite legal interest
required of a would-be intervenor under the Rules of Court.
Petitioner’s claim lacks merit. Under the law, petitioner was
never the legal wife of Tristan, hence her claim of legal interest
has no basis.
When petitioner and Tristan married on July 14, 1984, Tristan
was still lawfully married to Lily. The divorce decree that
Tristan and Lily obtained from the Dominican Republic never
dissolved the marriage bond between them. It is basic that laws
relating to family rights and duties, or to the status, condition
and legal capacity of persons are binding upon citizens of the
Philippines, even though living abroad.19 Regardless of where
a citizen of the Philippines might be, he or she will be governed
by Philippine laws with respect to his or her family rights and
duties, or to his or her status, condition and legal capacity.
Hence, if a Filipino regardless of whether he or she was married
here or abroad, initiates a petition abroad to obtain an absolute
divorce from spouse and eventually becomes successful in
getting an absolute divorce decree, the Philippines will not
recognize such absolute divorce.20

When Tristan and Lily married on May 18, 1968, their marriage
was governed by the provisions of the Civil Code21 which took
effect on August 30, 1950. In the case of Tenchavez v. Escano22
we held:

(1) That a foreign divorce between Filipino citizens, sought and

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

Thus, petitioner’s claim that she is the wife of Tristan even if

their marriage was celebrated abroad lacks merit. Thus,
petitioner never acquired the legal interest as a wife upon
which her motion for intervention is based.

Since petitioner’s motion for leave to file intervention was

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

WHEREFORE, the petition is DISMISSED. The assailed Decision

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

SO ORDERED.
SAN LUIS VS SAN LUIS

YNARES-SANTIAGO, J.:

Before us are consolidated petitions for review assailing the

February 4, 1998 Decision 1 of the Court of Appeals in CA-G.R.
CV No. 52647, which reversed and set aside the September 12,
1995 2 and January 31, 1996 3 Resolutions of the Regional Trial
Court of Makati City, Branch 134 in SP. Proc. No. M-3708; and
its May 15, 1998 Resolution 4 denying petitioners’ motion for
reconsideration.

The instant case involves the settlement of the estate of

Felicisimo T. San Luis (Felicisimo), who was the former
governor of the Province of Laguna. During his lifetime,
Felicisimo contracted three marriages. His first marriage was
with Virginia Sulit on March 17, 1942 out of which were born six
children, namely: Rodolfo, Mila, Edgar, Linda, Emilita and
Manuel. On August 11, 1963, Virginia predeceased Felicisimo.
Five years later, on May 1, 1968, Felicisimo married Merry Lee
Corwin, with whom he had a son, Tobias. However, on October
15, 1971, Merry Lee, an American citizen, filed a Complaint for
Divorce 5 before the Family Court of the First Circuit, State of
Hawaii, United States of America (U.S.A.), which issued a
Decree Granting Absolute Divorce and Awarding Child Custody
on December 14, 1973. 6
On June 20, 1974, Felicisimo married respondent Felicidad San
Luis, then surnamed Sagalongos, before Rev. Fr. William
Meyer, Minister of the United Presbyterian at Wilshire
Boulevard, Los Angeles, California, U.S.A. 7 He had no children
with respondent but lived with her for 18 years from the time of
their marriage up to his death on December 18, 1992.
Thereafter, respondent sought the dissolution of their conjugal
partnership assets and the settlement of Felicisimo’s estate. On
December 17, 1993, she filed a petition for letters of
administration 8 before the Regional Trial Court of Makati City,
docketed as SP. Proc. No. M-3708 which was raffled to Branch
146 thereof.
Respondent alleged that she is the widow of Felicisimo; that, at
the time of his death, the decedent was residing at 100 San
Juanico Street, New Alabang Village, Alabang, Metro Manila;
that the decedent’s surviving heirs are respondent as legal
spouse, his six children by his first marriage, and son by his
second marriage; that the decedent left real properties, both
conjugal and exclusive, valued at ₱30,304,178.00 more or less;
that the decedent does not have any unpaid debts. Respondent
prayed that the conjugal partnership assets be liquidated and
that letters of administration be issued to her.
On February 4, 1994, petitioner Rodolfo San Luis, one of the
children of Felicisimo by his first marriage, filed a motion to
dismiss 9 on the grounds of improper venue and failure to state
a cause of action. Rodolfo claimed that the petition for letters
of administration should have been filed in the Province of
Laguna because this was Felicisimo’s place of residence prior to
his death. He further claimed that respondent has no legal
personality to file the petition because she was only a mistress
of Felicisimo since the latter, at the time of his death, was still
legally married to Merry Lee.
On February 15, 1994, Linda invoked the same grounds and
joined her brother Rodolfo in seeking the dismissal 10 of the
petition. On February 28, 1994, the trial court issued an Order
11 denying the two motions to dismiss.
Unaware of the denial of the motions to dismiss, respondent
filed on March 5, 1994 her opposition 12 thereto. She
submitted documentary evidence showing that while
Felicisimo exercised the powers of his public office in Laguna,
he regularly went home to their house in New Alabang Village,
Alabang, Metro Manila which they bought sometime in 1982.
Further, she presented the decree of absolute divorce issued by
the Family Court of the First Circuit, State of Hawaii to prove
that the marriage of Felicisimo to Merry Lee had already been
dissolved. Thus, she claimed that Felicisimo had the legal
capacity to marry her by virtue of paragraph 2, 13 Article 26 of
the Family Code and the doctrine laid down in Van Dorn v.
Romillo, Jr. 14
Thereafter, Linda, Rodolfo and herein petitioner Edgar San
Luis, separately filed motions for reconsideration from the
Order denying their motions to dismiss. 15 They asserted that
paragraph 2, Article 26 of the Family Code cannot be given
retroactive effect to validate respondent’s bigamous marriage
with Felicisimo because this would impair vested rights in
derogation of Article 256 16 of the Family Code.
On April 21, 1994, Mila, another daughter of Felicisimo from his
first marriage, filed a motion to disqualify Acting Presiding
Judge Anthony E. Santos from hearing the case.
On October 24, 1994, the trial court issued an Order 17 denying
the motions for reconsideration. It ruled that respondent, as
widow of the decedent, possessed the legal standing to file the
petition and that venue was properly laid. Meanwhile, the
motion for disqualification was deemed moot and academic 18
because then Acting Presiding Judge Santos was substituted by
Judge Salvador S. Tensuan pending the resolution of said
motion.
Mila filed a motion for inhibition 19 against Judge Tensuan on
November 16, 1994. On even date, Edgar also filed a motion for
reconsideration 20 from the Order denying their motion for
reconsideration arguing that it does not state the facts and law
on which it was based.
On November 25, 1994, Judge Tensuan issued an Order 21
granting the motion for inhibition. The case was re-raffled to
Branch 134 presided by Judge Paul T. Arcangel.
On April 24, 1995, 22 the trial court required the parties to
submit their respective position papers on the twin issues of
venue and legal capacity of respondent to file the petition. On
May 5, 1995, Edgar manifested 23 that he is adopting the
arguments and evidence set forth in his previous motion for
reconsideration as his position paper. Respondent and Rodolfo
filed their position papers on June 14, 24 and June 20, 25 1995,
respectively.
On September 12, 1995, the trial court dismissed the petition
for letters of administration. It held that, at the time of his
death, Felicisimo was the duly elected governor and a resident
of the Province of Laguna. Hence, the petition should have
been filed in Sta. Cruz, Laguna and not in Makati City. It also
ruled that respondent was without legal capacity to file the
petition for letters of administration because her marriage with
Felicisimo was bigamous, thus, void ab initio. It found that the
decree of absolute divorce dissolving Felicisimo’s marriage to
Merry Lee was not valid in the Philippines and did not bind
Felicisimo who was a Filipino citizen. It also ruled that
paragraph 2, Article 26 of the Family Code cannot be
retroactively applied because it would impair the vested rights
of Felicisimo’s legitimate children.
Respondent moved for reconsideration 26 and for the
disqualification 27 of Judge Arcangel but said motions were
denied. 28
Respondent appealed to the Court of Appeals which reversed
and set aside the orders of the trial court in its assailed Decision
dated February 4, 1998, the dispositive portion of which states:
WHEREFORE, the Orders dated September 12, 1995 and
January 31, 1996 are hereby REVERSED and SET ASIDE; the
Orders dated February 28 and October 24, 1994 are
REINSTATED; and the records of the case is REMANDED to the
trial court for further proceedings. 29
The appellante court ruled that under Section 1, Rule 73 of the
Rules of Court, the term "place of residence" of the decedent,
for purposes of fixing the venue of the settlement of his estate,
refers to the personal, actual or physical habitation, or actual
residence or place of abode of a person as distinguished from
legal residence or domicile. It noted that although Felicisimo
discharged his functions as governor in Laguna, he actually
resided in Alabang, Muntinlupa. Thus, the petition for letters of
administration was properly filed in Makati City.
The Court of Appeals also held that Felicisimo had legal
capacity to marry respondent by virtue of paragraph 2, Article
26 of the Family Code and the rulings in Van Dorn v. Romillo, Jr.
30 and Pilapil v. Ibay-Somera. 31 It found that the marriage
between Felicisimo and Merry Lee was validly dissolved by
virtue of the decree of absolute divorce issued by the Family
Court of the First Circuit, State of Hawaii. As a result, under
paragraph 2, Article 26, Felicisimo was capacitated to contract
a subsequent marriage with respondent. Thus –
With the well-known rule – express mandate of paragraph 2,
Article 26, of the Family Code of the Philippines, the doctrines
in Van Dorn, Pilapil, and the reason and philosophy behind the
enactment of E.O. No. 227, — there is no justiciable reason to
sustain the individual view — sweeping statement — of Judge
Arc[h]angel, that "Article 26, par. 2 of the Family Code,
contravenes the basic policy of our state against divorce in any
form whatsoever." Indeed, courts cannot deny what the law
grants. All that the courts should do is to give force and effect
to the express mandate of the law. The foreign divorce having
been obtained by the Foreigner on December 14, 1992, 32 the
Filipino divorcee, "shall x x x have capacity to remarry under
Philippine laws". For this reason, the marriage between the
deceased and petitioner should not be denominated as "a
bigamous marriage.
Therefore, under Article 130 of the Family Code, the petitioner
as the surviving spouse can institute the judicial proceeding for
the settlement of the estate of the deceased. x x x 33
Edgar, Linda, and Rodolfo filed separate motions for
reconsideration 34 which were denied by the Court of Appeals.
On July 2, 1998, Edgar appealed to this Court via the instant
petition for review on certiorari. 35 Rodolfo later filed a
manifestation and motion to adopt the said petition which was
granted. 36
In the instant consolidated petitions, Edgar and Rodolfo insist
that the venue of the subject petition for letters of
administration was improperly laid because at the time of his
death, Felicisimo was a resident of Sta. Cruz, Laguna. They
contend that pursuant to our rulings in Nuval v. Guray 37 and
Romualdez v. RTC, Br. 7, Tacloban City, 38 "residence" is
synonymous with "domicile" which denotes a fixed permanent
residence to which when absent, one intends to return. They
claim that a person can only have one domicile at any given
time. Since Felicisimo never changed his domicile, the petition
for letters of administration should have been filed in Sta. Cruz,
Laguna.
Petitioners also contend that respondent’s marriage to
Felicisimo was void and bigamous because it was performed
during the subsistence of the latter’s marriage to Merry Lee.
They argue that paragraph 2, Article 26 cannot be retroactively
applied because it would impair vested rights and ratify the
void bigamous marriage. As such, respondent cannot be
considered the surviving wife of Felicisimo; hence, she has no
legal capacity to file the petition for letters of administration.
The issues for resolution: (1) whether venue was properly laid,
and (2) whether respondent has legal capacity to file the
subject petition for letters of administration.
The petition lacks merit.
Under Section 1, 39 Rule 73 of the Rules of Court, the petition
for letters of administration of the estate of Felicisimo should
be filed in the Regional Trial Court of the province "in which he
resides at the time of his death." In the case of Garcia Fule v.
Court of Appeals, 40 we laid down the doctrinal rule for
determining the residence – as contradistinguished from
domicile – of the decedent for purposes of fixing the venue of
the settlement of his estate:
[T]he term "resides" connotes ex vi termini "actual residence"
as distinguished from "legal residence or domicile." This term
"resides," like the terms "residing" and "residence," is elastic
and should be interpreted in the light of the object or purpose
of the statute or rule in which it is employed. In the application
of venue statutes and rules – Section 1, Rule 73 of the Revised
Rules of Court is of such nature – residence rather than domicile
is the significant factor. Even where the statute uses the word
"domicile" still it is construed as meaning residence and not
domicile in the technical sense. Some cases make a distinction
between the terms "residence" and "domicile" but as generally
used in statutes fixing venue, the terms are synonymous, and
convey the same meaning as the term "inhabitant." In other
words, "resides" should be viewed or understood in its popular
sense, meaning, the personal, actual or physical habitation of a
person, actual residence or place of abode. It signifies physical
presence in a place and actual stay thereat. In this popular
sense, the term means merely residence, that is, personal
residence, not legal residence or domicile. Residence simply
requires bodily presence as an inhabitant in a given place, while
domicile requires bodily presence in that place and also an
intention to make it one’s domicile. No particular length of time
of residence is required though; however, the residence must
be more than temporary. 41 (Emphasis supplied)
It is incorrect for petitioners to argue that "residence," for
purposes of fixing the venue of the settlement of the estate of
Felicisimo, is synonymous with "domicile." The rulings in Nuval
and Romualdez are inapplicable to the instant case because
they involve election cases. Needless to say, there is a
distinction between "residence" for purposes of election laws
and "residence" for purposes of fixing the venue of actions. In
election cases, "residence" and "domicile" are treated as
synonymous terms, that is, the fixed permanent residence to
which when absent, one has the intention of returning. 42
However, for purposes of fixing venue under the Rules of Court,
the "residence" of a person is his personal, actual or physical
habitation, or actual residence or place of abode, which may
not necessarily be his legal residence or domicile provided he
resides therein with continuity and consistency. 43 Hence, it is
possible that a person may have his residence in one place and
domicile in another.
In the instant case, while petitioners established that Felicisimo
was domiciled in Sta. Cruz, Laguna, respondent proved that he
also maintained a residence in Alabang, Muntinlupa from 1982
up to the time of his death. Respondent submitted in evidence
the Deed of Absolute Sale 44 dated January 5, 1983 showing
that the deceased purchased the aforesaid property. She also
presented billing statements 45 from the Philippine Heart
Center and Chinese General Hospital for the period August to
December 1992 indicating the address of Felicisimo at "100 San
Juanico, Ayala Alabang, Muntinlupa." Respondent also
presented proof of membership of the deceased in the Ayala
Alabang Village Association 46 and Ayala Country Club, Inc., 47
letter-envelopes 48 from 1988 to 1990 sent by the deceased’s
children to him at his Alabang address, and the deceased’s
calling cards 49 stating that his home/city address is at "100
San Juanico, Ayala Alabang Village, Muntinlupa" while his
office/provincial address is in "Provincial Capitol, Sta. Cruz,
Laguna."
From the foregoing, we find that Felicisimo was a resident of
Alabang, Muntinlupa for purposes of fixing the venue of the
settlement of his estate. Consequently, the subject petition for
letters of administration was validly filed in the Regional Trial
Court 50 which has territorial jurisdiction over Alabang,
Muntinlupa. The subject petition was filed on December 17,
1993. At that time, Muntinlupa was still a municipality and the
branches of the Regional Trial Court of the National Capital
Judicial Region which had territorial jurisdiction over
Muntinlupa were then seated in Makati City as per Supreme
Court Administrative Order No. 3. 51 Thus, the subject petition
was validly filed before the Regional Trial Court of Makati City.
Anent the issue of respondent Felicidad’s legal personality to
file the petition for letters of administration, we must first
resolve the issue of whether a Filipino who is divorced by his
alien spouse abroad may validly remarry under the Civil Code,
considering that Felicidad’s marriage to Felicisimo was
solemnized on June 20, 1974, or before the Family Code took
effect on August 3, 1988. In resolving this issue, we need not
retroactively apply the provisions of the Family Code,
particularly Art. 26, par. (2) considering that there is sufficient
jurisprudential basis allowing us to rule in the affirmative.
The case of Van Dorn v. Romillo, Jr. 52 involved a marriage
between a foreigner and his Filipino wife, which marriage was
subsequently dissolved through a divorce obtained abroad by
the latter. Claiming that the divorce was not valid under
Philippine law, the alien spouse alleged that his interest in the
properties from their conjugal partnership should be protected.
The Court, however, recognized the validity of the divorce and
held that the alien spouse had no interest in the properties
acquired by the Filipino wife after the divorce. Thus:
In this case, the divorce in Nevada released private respondent
from the marriage from the standards of American law, under
which divorce dissolves the marriage. As stated by the Federal
Supreme Court of the United States in Atherton vs. Atherton,
45 L. Ed. 794, 799:
"The purpose and effect of a decree of divorce from the bond of
matrimony by a competent jurisdiction are to change the
existing status or domestic relation of husband and wife, and to
free them both from the bond. The marriage tie, when thus
severed as to one party, ceases to bind either. A husband
without a wife, or a wife without a husband, is unknown to the
law. When the law provides, in the nature of a penalty, that the
guilty party shall not marry again, that party, as well as the
other, is still absolutely freed from the bond of the former
marriage."
Thus, pursuant to his national law, private respondent is no
longer the husband of petitioner. He would have no standing to
sue in the case below as petitioner’s husband entitled to
exercise control over conjugal assets. As he is bound by the
Decision of his own country’s Court, which validly exercised
jurisdiction over him, and whose decision he does not
repudiate, he is estopped by his own representation before said
Court from asserting his right over the alleged conjugal
property. 53
As to the effect of the divorce on the Filipino wife, the Court
ruled that she should no longer be considered married to the
alien spouse. Further, she should not be required to perform
her marital duties and obligations. It held:
To maintain, as private respondent does, that, under our laws,
petitioner has to be considered still married to private
respondent and still subject to a wife's obligations under Article
109, et. seq. of the Civil Code cannot be just. Petitioner should
not be obliged to live together with, observe respect and
fidelity, and render support to private respondent. The latter
should not continue to be one of her heirs with possible rights
to conjugal property. She should not be discriminated against
in her own country if the ends of justice are to be served. 54
This principle was thereafter applied in Pilapil v. Ibay-Somera
55 where the Court recognized the validity of a divorce
obtained abroad. In the said case, it was held that the alien
spouse is not a proper party in filing the adultery suit against his
Filipino wife. The Court stated that "the severance of the
marital bond had the effect of dissociating the former spouses
from each other, hence the actuations of one would not affect
or cast obloquy on the other." 56
Likewise, in Quita v. Court of Appeals, 57 the Court stated that
where a Filipino is divorced by his naturalized foreign spouse,
the ruling in Van Dorn applies. 58 Although decided on
December 22, 1998, the divorce in the said case was obtained
in 1954 when the Civil Code provisions were still in effect.
The significance of the Van Dorn case to the development of
limited recognition of divorce in the Philippines cannot be
denied. The ruling has long been interpreted as severing
marital ties between parties in a mixed marriage and
capacitating the Filipino spouse to remarry as a necessary
consequence of upholding the validity of a divorce obtained
abroad by the alien spouse. In his treatise, Dr. Arturo M.
Tolentino cited Van Dorn stating that "if the foreigner obtains a
valid foreign divorce, the Filipino spouse shall have capacity to
remarry under Philippine law." 59 In Garcia v. Recio, 60 the
Court likewise cited the aforementioned case in relation to
Article 26. 61
In the recent case of Republic v. Orbecido III, 62 the historical
background and legislative intent behind paragraph 2, Article
26 of the Family Code were discussed, to wit:
Brief Historical Background
On July 6, 1987, then President Corazon Aquino signed into law
Executive Order No. 209, otherwise known as the "Family
Code," which took effect on August 3, 1988. Article 26 thereof
states:
All marriages solemnized outside the Philippines in accordance
with the laws in force in the country where they were
solemnized, and valid there as such, shall also be valid in this
country, except those prohibited under Articles 35, 37, and 38.
On July 17, 1987, shortly after the signing of the original Family
Code, Executive Order No. 227 was likewise signed into law,
amending Articles 26, 36, and 39 of the Family Code. A second
paragraph was added to Article 26. As so amended, it now
provides:
ART. 26. All marriages solemnized outside the Philippines in
accordance with the laws in force in the country where they
were solemnized, and valid there as such, shall also be valid in
this country, except those prohibited under Articles 35(1), (4),
(5) and (6), 36, 37 and 38.
Where a marriage between a Filipino citizen and a foreigner is
validly celebrated and a divorce is thereafter validly obtained
abroad by the alien spouse capacitating him or her to remarry,
the Filipino spouse shall have capacity to remarry under
Philippine law. (Emphasis supplied)
Legislative Intent
Records of the proceedings of the Family Code deliberations
showed that the intent of Paragraph 2 of Article 26, according
to Judge Alicia Sempio-Diy, a member of the Civil Code
Revision Committee, is to avoid the absurd situation where the
Filipino spouse remains married to the alien spouse who, after
obtaining a divorce, is no longer married to the Filipino spouse.
Interestingly, Paragraph 2 of Article 26 traces its origin to the
1985 case of Van Dorn v. Romillo, Jr. The Van Dorn case
involved a marriage between a Filipino citizen and a foreigner.
The Court held therein that a divorce decree validly obtained by
the alien spouse is valid in the Philippines, and consequently,
the Filipino spouse is capacitated to remarry under Philippine
law. 63 (Emphasis added)
As such, the Van Dorn case is sufficient basis in resolving a
situation where a divorce is validly obtained abroad by the alien
spouse. With the enactment of the Family Code and paragraph
2, Article 26 thereof, our lawmakers codified the law already
established through judicial precedent.1awphi1.net
Indeed, when the object of a marriage is defeated by rendering
its continuance intolerable to one of the parties and productive
of no possible good to the community, relief in some way
should be obtainable. 64 Marriage, being a mutual and shared
commitment between two parties, cannot possibly be
productive of any good to the society where one is considered
released from the marital bond while the other remains bound
to it. Such is the state of affairs where the alien spouse obtains
a valid divorce abroad against the Filipino spouse, as in this
case.
Petitioners cite Articles 15 65 and 17 66 of the Civil Code in
stating that the divorce is void under Philippine law insofar as
Filipinos are concerned. However, in light of this Court’s rulings
in the cases discussed above, the Filipino spouse should not be
discriminated against in his own country if the ends of justice
are to be served. 67 In Alonzo v. Intermediate Appellate Court,
68 the Court stated:
But as has also been aptly observed, we test a law by its results;
and likewise, we may add, by its purposes. It is a cardinal rule
that, in seeking the meaning of the law, the first concern of the
judge should be to discover in its provisions the intent of the
lawmaker. Unquestionably, the law should never be interpreted
in such a way as to cause injustice as this is never within the
legislative intent. An indispensable part of that intent, in fact,
for we presume the good motives of the legislature, is to render
justice.
Thus, we interpret and apply the law not independently of but
in consonance with justice. Law and justice are inseparable, and
we must keep them so. To be sure, there are some laws that,
while generally valid, may seem arbitrary when applied in a
particular case because of its peculiar circumstances. In such a
situation, we are not bound, because only of our nature and
functions, to apply them just the same, in slavish obedience to
their language. What we do instead is find a balance between
the word and the will, that justice may be done even as the law
is obeyed.
As judges, we are not automatons. We do not and must not
unfeelingly apply the law as it is worded, yielding like robots to
the literal command without regard to its cause and
consequence. "Courts are apt to err by sticking too closely to
the words of a law," so we are warned, by Justice Holmes again,
"where these words import a policy that goes beyond them."
More than twenty centuries ago, Justinian defined justice "as
the constant and perpetual wish to render every one his due."
That wish continues to motivate this Court when it assesses the
facts and the law in every case brought to it for decision. Justice
is always an essential ingredient of its decisions. Thus when the
facts warrants, we interpret the law in a way that will render
justice, presuming that it was the intention of the lawmaker, to
begin with, that the law be dispensed with justice. 69
Applying the above doctrine in the instant case, the divorce
decree allegedly obtained by Merry Lee which absolutely
allowed Felicisimo to remarry, would have vested Felicidad
with the legal personality to file the present petition as
Felicisimo’s surviving spouse. However, the records show that
there is insufficient evidence to prove the validity of the divorce
obtained by Merry Lee as well as the marriage of respondent
and Felicisimo under the laws of the U.S.A. In Garcia v. Recio,
70 the Court laid down the specific guidelines for pleading and
proving foreign law and divorce judgments. It held that
presentation solely of the divorce decree is insufficient and that
proof of its authenticity and due execution must be presented.
Under Sections 24 and 25 of Rule 132, a writing or document
may be proven as a public or official record of a foreign country
by either (1) an official publication or (2) a copy thereof attested
by the officer having legal custody of the document. If the
record is not kept in the Philippines, such copy must be (a)
accompanied by a certificate issued by the proper diplomatic or
consular officer in the Philippine foreign service stationed in the
foreign country in which the record is kept and (b)
authenticated by the seal of his office. 71
With regard to respondent’s marriage to Felicisimo allegedly
solemnized in California, U.S.A., she submitted photocopies of
the Marriage Certificate and the annotated text 72 of the
Family Law Act of California which purportedly show that their
marriage was done in accordance with the said law. As stated in
Garcia, however, the Court cannot take judicial notice of
foreign laws as they must be alleged and proved. 73
Therefore, this case should be remanded to the trial court for
further reception of evidence on the divorce decree obtained
by Merry Lee and the marriage of respondent and Felicisimo.
Even assuming that Felicisimo was not capacitated to marry
respondent in 1974, nevertheless, we find that the latter has the
legal personality to file the subject petition for letters of
administration, as she may be considered the co-owner of
Felicisimo as regards the properties that were acquired through
their joint efforts during their cohabitation.
Section 6, 74 Rule 78 of the Rules of Court states that letters of
administration may be granted to the surviving spouse of the
decedent. However, Section 2, Rule 79 thereof also provides in
part:
SEC. 2. Contents of petition for letters of administration. – A
petition for letters of administration must be filed by an
interested person and must show, as far as known to the
petitioner: x x x.
An "interested person" has been defined as one who would be
benefited by the estate, such as an heir, or one who has a claim
against the estate, such as a creditor. The interest must be
material and direct, and not merely indirect or contingent. 75
In the instant case, respondent would qualify as an interested
person who has a direct interest in the estate of Felicisimo by
virtue of their cohabitation, the existence of which was not
denied by petitioners. If she proves the validity of the divorce
and Felicisimo’s capacity to remarry, but fails to prove that her
marriage with him was validly performed under the laws of the
U.S.A., then she may be considered as a co-owner under Article
144 76 of the Civil Code. This provision governs the property
relations between parties who live together as husband and
wife without the benefit of marriage, or their marriage is void
from the beginning. It provides that the property acquired by
either or both of them through their work or industry or their
wages and salaries shall be governed by the rules on co-
ownership. In a co-ownership, it is not necessary that the
property be acquired through their joint labor, efforts and
industry. Any property acquired during the union is prima facie
presumed to have been obtained through their joint efforts.
Hence, the portions belonging to the co-owners shall be
presumed equal, unless the contrary is proven. 77
Meanwhile, if respondent fails to prove the validity of both the
divorce and the marriage, the applicable provision would be
Article 148 of the Family Code which has filled the hiatus in
Article 144 of the Civil Code by expressly regulating the
property relations of couples living together as husband and
wife but are incapacitated to marry. 78 In Saguid v. Court of
Appeals, 79 we held that even if the cohabitation or the
acquisition of property occurred before the Family Code took
effect, Article 148 governs. 80 The Court described the property
regime under this provision as follows:
The regime of limited co-ownership of property governing the
union of parties who are not legally capacitated to marry each
other, but who nonetheless live together as husband and wife,
applies to properties acquired during said cohabitation in
proportion to their respective contributions. Co-ownership will
only be up to the extent of the proven actual contribution of
money, property or industry. Absent proof of the extent
thereof, their contributions and corresponding shares shall be
presumed to be equal.
In the cases of Agapay v. Palang, and Tumlos v. Fernandez,
which involved the issue of co-ownership of properties acquired
by the parties to a bigamous marriage and an adulterous
relationship, respectively, we ruled that proof of actual
contribution in the acquisition of the property is essential. x x x
As in other civil cases, the burden of proof rests upon the party
who, as determined by the pleadings or the nature of the case,
asserts an affirmative issue. Contentions must be proved by
competent evidence and reliance must be had on the strength
of the party’s own evidence and not upon the weakness of the
opponent’s defense. x x x 81
In view of the foregoing, we find that respondent’s legal
capacity to file the subject petition for letters of administration
may arise from her status as the surviving wife of Felicisimo or
as his co-owner under Article 144 of the Civil Code or Article
148 of the Family Code.

WHEREFORE, the petition is DENIED. The Decision of the

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

SO ORDERED.

LAVADIA VS HEIRS OF LUNA

BERSAMIN, J.:

Divorce between Filipinos is void and ineffectual under the

nationality rule adopted by Philippine law. Hence, any
settlement of property between the parties of the first
marriage involving Filipinos submitted as an incident of a
divorce obtained in a foreign country lacks competent judicial
approval, and cannot be enforceable against the assets of the
husband who contracts a subsequent marriage.

The Case

The petitioner, the second wife of the late Atty. Juan Luces
Luna, appeals the adverse decision promulgated on November
11, 2005,1 whereby the Court of Appeals (CA) affirmed with
modification the decision rendered on August 27, 2001 by the
Regional Trial Court (RTC), Branch 138, in Makati City.2 The CA
thereby denied her right in the 25/100 pro indiviso share of the
husband in a condominium unit, and in the law books of the
husband acquired during the second marriage.

Antecedents

The antecedent facts were summarized by the CA as follows:

ATTY. LUNA, a practicing lawyer, was at first a name partner in
the prestigious law firm Sycip, Salazar, Luna, Manalo,
Hernandez & Feliciano Law Offices at that time when he was
living with his first wife, herein intervenor-appellant Eugenia
Zaballero-Luna (EUGENIA), whom he initially married ina civil
ceremony conducted by the Justice of the Peace of Parañaque,
Rizal on September 10, 1947 and later solemnized in a church
ceremony at the Pro-Cathedral in San Miguel, Bulacan on
September 12, 1948. In ATTY. LUNA’s marriage to EUGENIA,
they begot seven (7) children, namely: Regina Maria L. Nadal,
Juan Luis Luna, Araceli Victoria L. Arellano, Ana Maria L.
Tabunda, Gregorio Macario Luna, Carolina Linda L. Tapia, and
Cesar Antonio Luna. After almost two (2) decades of marriage,
ATTY. LUNA and EUGENIA eventually agreed to live apart
from each other in February 1966 and agreed to separation of
property, to which end, they entered into a written agreement
entitled "AGREEMENT FOR SEPARATION AND PROPERTY
SETTLEMENT" dated November 12, 1975, whereby they
agreed to live separately and to dissolve and liquidate their
conjugal partnership of property.
On January 12, 1976, ATTY. LUNA obtained a divorce decree of
his marriage with EUGENIA from the Civil and Commercial
Chamber of the First Circumscription of the Court of First
Instance of Sto. Domingo, Dominican Republic. Also in
Sto.Domingo, Dominican Republic, on the same date, ATTY.
LUNA contracted another marriage, this time with SOLEDAD.
Thereafter, ATTY. LUNA and SOLEDAD returned to the
Philippines and lived together as husband and wife until 1987.
Sometime in 1977, ATTY. LUNA organized a new law firm
named: Luna, Puruganan, Sison and Ongkiko (LUPSICON)
where ATTY. LUNA was the managing partner.
On February 14, 1978, LUPSICON through ATTY. LUNA
purchased from Tandang Sora Development Corporation the
6th Floor of Kalaw-Ledesma Condominium
Project(condominium unit) at Gamboa St., Makati City,
consisting of 517.52 square meters, for ₱1,449,056.00, to be
paid on installment basis for 36months starting on April 15,
1978. Said condominium unit was to be usedas law office of
LUPSICON. After full payment, the Deed of Absolute Sale over
the condominium unit was executed on July 15, 1983, and CCT
No. 4779 was issued on August 10, 1983, which was registered
bearing the following names:
"JUAN LUCES LUNA, married to Soledad L. Luna (46/100);
MARIO E. ONGKIKO, married to Sonia P.G. Ongkiko (25/100);
GREGORIO R. PURUGANAN, married to Paz A. Puruganan
(17/100); and TERESITA CRUZ SISON, married to Antonio J.M.
Sison (12/100) x x x" Subsequently, 8/100 share of ATTY. LUNA
and 17/100 share of Atty. Gregorio R. Puruganan in the
condominium unit was sold to Atty. Mario E. Ongkiko, for
which a new CCT No. 21761 was issued on February 7, 1992 in
the following names:
"JUAN LUCES LUNA, married to Soledad L. Luna (38/100);
MARIO E. ONGKIKO, married to Sonia P.G. Ongkiko (50/100);
TERESITA CRUZ SISON, married to Antonio J.M. Sison (12/100)
x x x"
Sometime in 1992, LUPSICON was dissolved and the
condominium unit was partitioned by the partners but the
same was still registered in common under CCT No. 21716. The
parties stipulated that the interest of ATTY. LUNA over the
condominium unit would be 25/100 share. ATTY. LUNA
thereafter established and headed another law firm with Atty.
Renato G. Dela Cruzand used a portion of the office
condominium unit as their office. The said law firm lasted until
the death of ATTY. JUAN on July 12, 1997.
After the death of ATTY. JUAN, his share in the condominium
unit including the lawbooks, office furniture and equipment
found therein were taken over by Gregorio Z. Luna, ATTY.
LUNA’s son of the first marriage. Gregorio Z. Luna thenleased
out the 25/100 portion of the condominium unit belonging to
his father to Atty. Renato G. De la Cruz who established his
own law firm named Renato G. De la Cruz & Associates.
The 25/100 pro-indiviso share of ATTY. Luna in the
condominium unit as well as the law books, office furniture and
equipment became the subject of the complaint filed by
SOLEDAD against the heirs of ATTY. JUAN with the RTC of
Makati City, Branch 138, on September 10, 1999, docketed as
Civil Case No. 99-1644. The complaint alleged that the subject
properties were acquired during the existence of the marriage
between ATTY. LUNA and SOLEDAD through their joint efforts
that since they had no children, SOLEDAD became co-owner of
the said properties upon the death of ATTY. LUNA to the
extent of ¾ pro-indiviso share consisting of her ½ share in the
said properties plus her ½ share in the net estate of ATTY.
LUNA which was bequeathed to her in the latter’s last will and
testament; and thatthe heirs of ATTY. LUNA through Gregorio
Z. Luna excluded SOLEDAD from her share in the subject
properties. The complaint prayed that SOLEDAD be declared
the owner of the ¾ portion of the subject properties;that the
same be partitioned; that an accounting of the rentals on the
condominium unit pertaining to the share of SOLEDAD be
conducted; that a receiver be appointed to preserve ad
administer the subject properties;and that the heirs of ATTY.
LUNA be ordered to pay attorney’s feesand costs of the suit to
SOLEDAD.3
Ruling of the RTC
On August 27, 2001, the RTC rendered its decision after trial
upon the aforementioned facts,4 disposing thusly:
WHEREFORE, judgment is rendered as follows:
(a) The 24/100 pro-indiviso share in the condominium unit
located at the SIXTH FLOOR of the KALAW LEDESMA
CONDOMINIUM PROJECT covered by Condominium
Certificate of Title No. 21761 consisting of FIVE HUNDRED
SEVENTEEN (517/100) SQUARE METERS is adjudged to have
been acquired by Juan Lucas Luna through his sole industry;
(b) Plaintiff has no right as owner or under any other concept
over the condominium unit, hence the entry in Condominium
Certificate of Title No. 21761 of the Registry of Deeds of Makati
with respect to the civil status of Juan Luces Luna should be
changed from "JUAN LUCES LUNA married to Soledad L.
Luna" to "JUAN LUCES LUNA married to Eugenia Zaballero
Luna";
(c) Plaintiff is declared to be the owner of the books Corpus
Juris, Fletcher on Corporation, American Jurisprudence and
Federal Supreme Court Reports found in the condominium unit
and defendants are ordered to deliver them to the plaintiff as
soon as appropriate arrangements have been madefor
transport and storage.
No pronouncement as to costs.
SO ORDERED.5
Decision of the CA
Both parties appealed to the CA.6
On her part, the petitioner assigned the following errors to the
RTC, namely:
I. THE LOWER COURT ERRED IN RULING THAT THE
CONDOMINIUM UNIT WAS ACQUIRED THRU THE SOLE
INDUSTRY OF ATTY. JUAN LUCES LUNA;
II. THE LOWER COURT ERRED IN RULING THAT
PLAINTIFFAPPELLANT DID NOT CONTRIBUTE MONEY FOR
THE ACQUISITION OF THE CONDOMINIUM UNIT;
III. THE LOWER COURT ERRED IN GIVING CREDENCE TO
PORTIONS OF THE TESTIMONY OF GREGORIO LUNA, WHO
HAS NO ACTUAL KNOWLEDGE OF THE ACQUISITION OF
THE UNIT, BUT IGNORED OTHER PORTIONS OF HIS
TESTIMONY FAVORABLE TO THE PLAINTIFF-APPELLANT;
IV. THE LOWER COURT ERRED IN NOT GIVING SIGNIFICANCE
TO THE FACT THAT THE CONJUGAL PARTNERSHIP
BETWEEN LUNA AND INTERVENOR-APPELLANT WAS
ALREADY DISSOLVED AND LIQUIDATED PRIOR TO THE
UNION OF PLAINTIFF-APPELLANT AND LUNA;
V. THE LOWER COURT ERRED IN GIVING UNDUE
SIGNIFICANCE TO THE ABSENCE OF THE DISPOSITION OF
THE CONDOMINIUM UNIT IN THE HOLOGRAPHIC WILL OF
THE PLAINTIFF-APPELLANT;
VI. THE LOWER COURT ERRED IN GIVING UNDUE
SIGNIFICANCE TO THE FACTTHAT THE NAME OF PLAINTIFF-
APPELLANT DID NOT APPEAR IN THE DEED OF ABSOLUTE
SALE EXECUTED BY TANDANG SORA DEVELOPMENT
CORPORATION OVER THE CONDOMINIUM UNIT;
VII. THE LOWER COURT ERRED IN RULING THAT NEITHER
ARTICLE 148 OF THE FAMILYCODE NOR ARTICLE 144 OF THE
CIVIL CODE OF THE PHILIPPINES ARE APPLICABLE;
VIII. THE LOWER COURT ERRED IN NOT RULING THAT THE
CAUSE OF ACTION OF THE INTERVENOR-APPELLANT HAS
BEEN BARRED BY PESCRIPTION AND LACHES; and
IX. THE LOWER COURT ERRED IN NOT
EXPUNGING/DISMISSING THE INTERVENTION FOR FAILURE
OF INTERVENOR-APPELLANT TO PAY FILING FEE.7
In contrast, the respondents attributedthe following errors to
the trial court, to wit:
I. THE LOWER COURT ERRED IN HOLDING THAT CERTAIN
FOREIGN LAW BOOKS IN THE LAW OFFICE OF ATTY. LUNA
WERE BOUGHT WITH THE USE OF PLAINTIFF’S MONEY;
II. THE LOWER COURT ERRED IN HOLDING THAT PLAINTIFF
PROVED BY PREPONDERANCE OF EVIDENCE (HER CLAIM
OVER) THE SPECIFIED FOREIGN LAW BOOKS FOUND IN
ATTY. LUNA’S LAW OFFICE; and
III. THE LOWER COURT ERRED IN NOT HOLDING THAT,
ASSUMING PLAINTIFF PAID FOR THE SAID FOREIGN LAW
BOOKS, THE RIGHT TO RECOVER THEM HAD PRESCRIBED
AND BARRED BY LACHES AND ESTOPPEL.8
On November 11, 2005, the CA promulgated its assailed
modified decision,9 holding and ruling:
EUGENIA, the first wife, was the legitimate wife of ATTY.
LUNA until the latter’s death on July 12, 1997. The absolute
divorce decree obtained by ATTY. LUNA inthe Dominican
Republic did not terminate his prior marriage with EUGENIA
because foreign divorce between Filipino citizens is not
recognized in our jurisdiction. x x x10
WHEREFORE, premises considered, the assailed August 27,
2001 Decision of the RTC of MakatiCity, Branch 138, is hereby
MODIFIEDas follows:
(a) The 25/100 pro-indiviso share in the condominium unit at
the SIXTH FLOOR of the KALAW LEDESMA CONDOMINIUM
PROJECT covered by Condominium Certificate of Title No.
21761 consisting of FIVE HUNDRED SEVENTEEN (517/100) (sic)
SQUARE METERS is hereby adjudged to defendants-
appellants, the heirs of Juan Luces Luna and Eugenia Zaballero-
Luna (first marriage), having been acquired from the sole funds
and sole industry of Juan Luces Luna while marriage of Juan
Luces Luna and Eugenia Zaballero-Luna (first marriage) was
still subsisting and valid;
(b) Plaintiff-appellant Soledad Lavadia has no right as owner or
under any other concept over the condominium unit, hence the
entry in Condominium Certificate of Title No. 21761 of the
Registry of Deeds ofMakati with respect to the civil status of
Juan Luces Luna should be changed from "JUAN LUCES LUNA
married to Soledad L. Luna" to "JUAN LUCES LUNA married to
Eugenia Zaballero Luna";
(c) Defendants-appellants, the heirs of Juan Luces Luna and
Eugenia Zaballero-Luna(first marriage) are hereby declared to
be the owner of the books Corpus Juris, Fletcher on
Corporation, American Jurisprudence and Federal Supreme
Court Reports found in the condominium unit.
No pronouncement as to costs.
SO ORDERED.11
On March 13, 2006,12 the CA denied the petitioner’s motion for
reconsideration.13
Issues
In this appeal, the petitioner avers in her petition for review on
certiorari that:
A. The Honorable Court of Appeals erred in ruling that the
Agreement for Separation and Property Settlement executed
by Luna and Respondent Eugenia was unenforceable; hence,
their conjugal partnership was not dissolved and liquidated;
B. The Honorable Court of Appeals erred in not recognizing the
Dominican Republic court’s approval of the Agreement;
C. The Honorable Court of Appeals erred in ruling that
Petitioner failed to adduce sufficient proof of actual
contribution to the acquisition of purchase of the subject
condominium unit; and
D. The Honorable Court of Appeals erred in ruling that
Petitioner was not entitled to the subject law books.14
The decisive question to be resolved is who among the
contending parties should be entitled to the 25/100 pro
indivisoshare in the condominium unit; and to the law books
(i.e., Corpus Juris, Fletcher on Corporation, American
Jurisprudence and Federal Supreme Court Reports).
The resolution of the decisive question requires the Court to
ascertain the law that should determine, firstly, whether the
divorce between Atty. Luna and Eugenia Zaballero-Luna
(Eugenia) had validly dissolved the first marriage; and,
secondly, whether the second marriage entered into by the late
Atty. Luna and the petitioner entitled the latter to any rights in
property. Ruling of the Court
We affirm the modified decision of the CA.
1. Atty. Luna’s first marriage with Eugenia subsisted up to the
time of his death
The first marriage between Atty. Luna and Eugenia, both
Filipinos, was solemnized in the Philippines on September 10,
1947. The law in force at the time of the solemnization was the
Spanish Civil Code, which adopted the nationality rule. The
Civil Code continued to follow the nationality rule, to the effect
that Philippine laws relating to family rights and duties, or to
the status, condition and legal capacity of persons were binding
upon citizens of the Philippines, although living abroad.15
Pursuant to the nationality rule, Philippine laws governed this
case by virtue of both Atty. Luna and Eugenio having remained
Filipinos until the death of Atty. Luna on July 12, 1997
terminated their marriage.
From the time of the celebration of the first marriage on
September 10, 1947 until the present, absolute divorce
between Filipino spouses has not been recognized in the
Philippines. The non-recognition of absolute divorce between
Filipinos has remained even under the Family Code,16 even if
either or both of the spouses are residing abroad.17 Indeed, the
only two types of defective marital unions under our laws have
been the void and the voidable marriages. As such, the
remedies against such defective marriages have been limited to
the declaration of nullity of the marriage and the annulment of
the marriage.
It is true that on January 12, 1976, the Court of First Instance
(CFI) of Sto. Domingo in the Dominican Republic issued the
Divorce Decree dissolving the first marriage of Atty. Luna and
Eugenia.18 Conformably with the nationality rule, however, the
divorce, even if voluntarily obtained abroad, did not dissolve
the marriage between Atty. Luna and Eugenia, which subsisted
up to the time of his death on July 12, 1997. This finding
conforms to the Constitution, which characterizes marriage as
an inviolable social institution,19 and regards it as a special
contract of permanent union between a man and a woman for
the establishment of a conjugal and family life.20 The non-
recognition of absolute divorce in the Philippines is a
manifestation of the respect for the sanctity of the marital
union especially among Filipino citizens. It affirms that the
extinguishment of a valid marriage must be grounded only
upon the death of either spouse, or upon a ground expressly
provided bylaw. For as long as this public policy on marriage
between Filipinos exists, no divorce decree dissolving the
marriage between them can ever be given legal or judicial
recognition and enforcement in this jurisdiction.
2. The Agreement for Separation and Property Settlement was
void for lack of court approval
The petitioner insists that the Agreement for Separation and
Property Settlement (Agreement) that the late Atty. Luna and
Eugenia had entered into and executed in connection with the
divorce proceedings before the CFI of Sto. Domingo in the
Dominican Republic to dissolve and liquidate their conjugal
partnership was enforceable against Eugenia. Hence, the CA
committed reversible error in decreeing otherwise.
The insistence of the petitioner was unwarranted.
Considering that Atty. Luna and Eugenia had not entered into
any marriage settlement prior to their marriage on September
10, 1947, the system of relative community or conjugal
partnership of gains governed their property relations. This is
because the Spanish Civil Code, the law then in force at the
time of their marriage, did not specify the property regime of
the spouses in the event that they had not entered into any
marriage settlement before or at the time of the marriage.
Article 119 of the Civil Code clearly so provides, to wit:
Article 119. The future spouses may in the marriage
settlements agree upon absolute or relative community of
property, or upon complete separation of property, or upon any
other regime. In the absence of marriage settlements, or when
the same are void, the system of relative community or
conjugal partnership of gains as established in this Code, shall
govern the property relations between husband and wife.
Article 142 of the Civil Code has defined a conjugal partnership
of gains thusly:
Article 142. By means of the conjugal partnership of gains the
husband and wife place in a common fund the fruits of their
separate property and the income from their work or industry,
and divide equally, upon the dissolution of the marriage or of
the partnership, the net gains or benefits obtained
indiscriminately by either spouse during the marriage.
The conjugal partnership of gains subsists until terminated for
any of various causes of termination enumerated in Article 175
of the Civil Code, viz:
Article 175. The conjugal partnership of gains terminates:
(1) Upon the death of either spouse;
(2) When there is a decree of legal separation;
(3) When the marriage is annulled;
(4) In case of judicial separation of property under Article 191.
The mere execution of the Agreement by Atty. Luna and
Eugenia did not per se dissolve and liquidate their conjugal
partnership of gains. The approval of the Agreement by a
competent court was still required under Article 190 and Article
191 of the Civil Code, as follows:
Article 190. In the absence of an express declaration in the
marriage settlements, the separation of property between
spouses during the marriage shall not take place save in virtue
of a judicial order. (1432a)
Article 191. The husband or the wife may ask for the separation
of property, and it shall be decreed when the spouse of the
petitioner has been sentenced to a penalty which carries with it
civil interdiction, or has been declared absent, or when legal
separation has been granted.
The husband and the wife may agree upon the dissolution of
the conjugal partnership during the marriage, subject to judicial
approval. All the creditors of the husband and of the wife, as
well as of the conjugal partnership shall be notified of any
petition for judicial approval or the voluntary dissolution of the
conjugal partnership, so that any such creditors may appear at
the hearing to safeguard his interests. Upon approval of the
petition for dissolution of the conjugal partnership, the court
shall take such measures as may protect the creditors and
other third persons.
After dissolution of the conjugal partnership, the provisions of
articles 214 and 215 shall apply. The provisions of this Code
concerning the effect of partition stated in articles 498 to 501
shall be applicable. (1433a)
But was not the approval of the Agreement by the CFI of Sto.
Domingo in the Dominican Republic sufficient in dissolving and
liquidating the conjugal partnership of gains between the late
Atty. Luna and Eugenia?
The query is answered in the negative. There is no question
that the approval took place only as an incident of the action
for divorce instituted by Atty. Luna and Eugenia, for, indeed,
the justifications for their execution of the Agreement were
identical to the grounds raised in the action for divorce.21 With
the divorce not being itself valid and enforceable under
Philippine law for being contrary to Philippine public policy and
public law, the approval of the Agreement was not also legally
valid and enforceable under Philippine law. Consequently, the
conjugal partnership of gains of Atty. Luna and Eugenia
subsisted in the lifetime of their marriage.
3. Atty. Luna’s marriage with Soledad, being bigamous, was
void; properties acquired during their marriage were governed
by the rules on co-ownership
What law governed the property relations of the second
marriage between Atty. Luna and Soledad?
The CA expressly declared that Atty. Luna’s subsequent
marriage to Soledad on January 12, 1976 was void for being
bigamous,22 on the ground that the marriage between Atty.
Luna and Eugenia had not been dissolved by the Divorce
Decree rendered by the CFI of Sto. Domingo in the Dominican
Republic but had subsisted until the death of Atty. Luna on July
12, 1997.
The Court concurs with the CA.
In the Philippines, marriages that are bigamous, polygamous,
or incestuous are void. Article 71 of the Civil Code clearly states:
Article 71. All marriages performed outside the Philippines in
accordance with the laws in force in the country where they
were performed, and valid there as such, shall also be valid in
this country, except bigamous, polygamous, or incestuous
marriages as determined by Philippine law.
Bigamy is an illegal marriage committed by contracting a
second or subsequent marriage before the first marriage has
been legally dissolved, or before the absent spouse has been
declared presumptively dead by means of a judgment rendered
in the proper proceedings.23 A bigamous marriage is
considered void ab initio.24
Due to the second marriage between Atty. Luna and the
petitioner being void ab initio by virtue of its being bigamous,
the properties acquired during the bigamous marriage were
governed by the rules on co-ownership, conformably with
Article 144 of the Civil Code, viz:
Article 144. When a man and a woman live together as husband
and wife, but they are not married, or their marriage is void
from the beginning, the property acquired by either or both of
them through their work or industry or their wages and salaries
shall be governed by the rules on co-ownership.(n)
In such a situation, whoever alleges co-ownership carried the
burden of proof to confirm such fact.1âwphi1 To establish co-
ownership, therefore, it became imperative for the petitioner
to offer proof of her actual contributions in the acquisition of
property. Her mere allegation of co-ownership, without
sufficient and competent evidence, would warrant no relief in
her favor. As the Court explained in Saguid v. Court of
Appeals:25
In the cases of Agapay v. Palang, and Tumlos v. Fernandez,
which involved the issue of co-ownership of properties acquired
by the parties to a bigamous marriage and an adulterous
relationship, respectively, we ruled that proof of actual
contribution in the acquisition of the property is essential. The
claim of co-ownership of the petitioners therein who were
parties to the bigamous and adulterous union is without basis
because they failed to substantiate their allegation that they
contributed money in the purchase of the disputed properties.
Also in Adriano v. Court of Appeals, we ruled that the fact that
the controverted property was titled in the name of the parties
to an adulterous relationship is not sufficient proof of
coownership absent evidence of actual contribution in the
acquisition of the property.
As in other civil cases, the burden of proof rests upon the party
who, as determined by the pleadings or the nature of the case,
asserts an affirmative issue. Contentions must be proved by
competent evidence and reliance must be had on the strength
of the party’s own evidence and not upon the weakness of the
opponent’s defense. This applies with more vigor where, as in
the instant case, the plaintiff was allowed to present evidence
ex parte.1âwphi1 The plaintiff is not automatically entitled to
the relief prayed for. The law gives the defendant some
measure of protection as the plaintiff must still prove the
allegations in the complaint. Favorable relief can be granted
only after the court is convinced that the facts proven by the
plaintiff warrant such relief. Indeed, the party alleging a fact
has the burden of proving it and a mere allegation is not
evidence.26
The petitioner asserts herein that she sufficiently proved her
actual contributions in the purchase of the condominium unit in
the aggregate amount of at least ₱306,572.00, consisting in
direct contributions of ₱159,072.00, and in repaying the loans
Atty. Luna had obtained from Premex Financing and Banco
Filipino totaling ₱146,825.30;27 and that such aggregate
contributions of ₱306,572.00 corresponded to almost the entire
share of Atty. Luna in the purchase of the condominium unit
amounting to ₱362,264.00 of the unit’s purchase price of
₱1,449,056.00.28 The petitioner further asserts that the
lawbooks were paid for solely out of her personal funds, proof
of which Atty. Luna had even sent her a "thank you" note;29
that she had the financial capacity to make the contributions
and purchases; and that Atty. Luna could not acquire the
properties on his own due to the meagerness of the income
derived from his law practice.
Did the petitioner discharge her burden of proof on the co-
ownership?
In resolving the question, the CA entirely debunked the
petitioner’s assertions on her actual contributions through the
following findings and conclusions, namely:
SOLEDAD was not able to prove by preponderance of evidence
that her own independent funds were used to buy the law office
condominium and the law books subject matter in contention
in this case – proof that was required for Article 144 of the New
Civil Code and Article 148 of the Family Code to apply – as to
cases where properties were acquired by a man and a woman
living together as husband and wife but not married, or under a
marriage which was void ab initio. Under Article 144 of the New
Civil Code, the rules on co-ownership would govern. But this
was not readily applicable to many situations and thus it
created a void at first because it applied only if the parties were
not in any way incapacitated or were without impediment to
marry each other (for it would be absurd to create a co-
ownership where there still exists a prior conjugal partnership
or absolute community between the man and his lawful wife).
This void was filled upon adoption of the Family Code. Article
148 provided that: only the property acquired by both of the
parties through their actual joint contribution of money,
property or industry shall be owned in common and in
proportion to their respective contributions. Such contributions
and corresponding shares were prima facie presumed to be
equal. However, for this presumption to arise, proof of actual
contribution was required. The same rule and presumption was
to apply to joint deposits of money and evidence of credit. If
one of the parties was validly married to another, his or her
share in the co-ownership accrued to the absolute community
or conjugal partnership existing in such valid marriage. If the
party who acted in bad faith was not validly married to another,
his or her share shall be forfeited in the manner provided in the
last paragraph of the Article 147. The rules on forfeiture applied
even if both parties were in bad faith. Co-ownership was the
exception while conjugal partnership of gains was the strict rule
whereby marriage was an inviolable social institution and
divorce decrees are not recognized in the Philippines, as was
held by the Supreme Court in the case of Tenchavez vs. Escaño,
G.R. No. L-19671, November 29, 1965, 15 SCRA 355, thus:
As to the 25/100pro-indivisoshare of ATTY. LUNA in the
condominium unit, SOLEDAD failed to prove that she made an
actual contribution to purchase the said property. She failed to
establish that the four (4) checks that she presented were
indeed used for the acquisition of the share of ATTY. LUNA in
the condominium unit. This was aptly explained in the Decision
of the trial court, viz.:
"x x x The first check, Exhibit "M" for ₱55,000.00 payable to
Atty. Teresita Cruz Sison was issued on January 27, 1977, which
was thirteen (13) months before the Memorandum of
Agreement, Exhibit "7" was signed. Another check issued on
April 29, 1978 in the amount of ₱97,588.89, Exhibit "P" was
payable to Banco Filipino. According to the plaintiff, this was in
payment of the loan of Atty. Luna. The third check which was
for ₱49,236.00 payable to PREMEX was dated May 19, 1979,
also for payment of the loan of Atty. Luna. The fourth check,
Exhibit "M", for ₱4,072.00 was dated December 17, 1980. None
of the foregoing prove that the amounts delivered by plaintiff
to the payees were for the acquisition of the subject
condominium unit. The connection was simply not established.
x x x"
SOLEDAD’s claim that she made a cash contribution of
₱100,000.00 is unsubstantiated. Clearly, there is no basis for
SOLEDAD’s claim of co-ownership over the 25/100 portion of Luna in the condominium unit, and of the law books pertained
the condominium unit and the trial court correctly found that to the respondents as the lawful heirs of Atty. Luna.
the same was acquired through the sole industry of ATTY.
LUNA, thus: WHEREFORE, the Court AFFIRMS the decision promulgated on
November 11, 2005; and ORDERS the petitioner to pay the
"The Deed of Absolute Sale, Exhibit "9", covering the costs of suit.
condominium unit was in the name of Atty. Luna, together with
his partners in the law firm. The name of the plaintiff does not SO ORDERED.
appear as vendee or as the spouse of Atty. Luna. The same was
acquired for the use of the Law firm of Atty. Luna. The loans
from Allied Banking Corporation and Far East Bank and Trust
Company were loans of Atty. Luna and his partners and plaintiff
does not have evidence to show that she paid for them fully or
partially. x x x"

The fact that CCT No. 4779 and subsequently, CCT No. 21761
were in the name of "JUAN LUCES LUNA, married to Soledad
L. Luna" was no proof that SOLEDAD was a co-owner of the
condominium unit. Acquisition of title and registration thereof NOVERAS VS NOVERAS
are two different acts. It is well settled that registration does
not confer title but merely confirms one already existing. The PEREZ, J.:
phrase "married to" preceding "Soledad L. Luna" is merely Before the Court is a petition for review assailing the 9 May
descriptive of the civil status of ATTY. LUNA. 2008 Decision1 of the Court of Appeals in CA-G.R .. CV No.
SOLEDAD, the second wife, was not even a lawyer. So it is but 88686, which affirmed in part the 8 December 2006 Decision2
logical that SOLEDAD had no participation in the law firm or in of the Regional Trial Court (RTC) of Baler, Aurora, Branch 96.
the purchase of books for the law firm. SOLEDAD failed to The factual antecedents are as follow:
prove that she had anything to contribute and that she actually
purchased or paid for the law office amortization and for the David A. Noveras (David) and Leticia T. Noveras (Leticia) were
law books. It is more logical to presume that it was ATTY. married on 3 December 1988 in Quezon City, Philippines. They
LUNA who bought the law office space and the law books from resided in California, United States of America (USA) where
his earnings from his practice of law rather than embarrassingly they eventually acquired American citizenship. They then
beg or ask from SOLEDAD money for use of the law firm that begot two children, namely: Jerome T.
he headed.30
Noveras, who was born on 4 November 1990 and Jena T.
The Court upholds the foregoing findings and conclusions by Noveras, born on 2 May 1993. David was engaged in courier
the CA both because they were substantiated by the records service business while Leticia worked as a nurse in San
and because we have not been shown any reason to revisit and Francisco, California.
undo them. Indeed, the petitioner, as the party claiming the co-
ownership, did not discharge her burden of proof. Her mere During the marriage, they acquired the following properties in
allegations on her contributions, not being evidence,31 did not the Philippines and in the USA.
serve the purpose. In contrast, given the subsistence of the first
The Sampaloc property used to be owned by David’s parents.
marriage between Atty. Luna and Eugenia, the presumption
The parties herein secured a loan from a bank and mortgaged
that Atty. Luna acquired the properties out of his own personal
the property. When said property was about to be foreclosed,
funds and effort remained. It should then be justly concluded
the couple paid a total of ₱1.5 Million for the redemption of the
that the properties in litis legally pertained to their conjugal
same.
partnership of gains as of the time of his death. Consequently,
the sole ownership of the 25/100 pro indiviso share of Atty.
Due to business reverses, David left the USA and returned to
the Philippines in 2001. In December 2002, Leticia executed a
Special Power of Attorney (SPA) authorizing David to sell the
Sampaloc property for ₱2.2 Million. According to Leticia,
sometime in September 2003, David abandoned his family and
lived with Estrellita Martinez in Aurora province. Leticia
claimed that David agreed to and executed a Joint Affidavit
with Leticia in the presence of David’s father, Atty. Isaias
Noveras, on 3 December 2003 stating that: 1) the ₱1.1Million
proceeds from the sale of the Sampaloc property shall be paid
to and collected by Leticia; 2) that David shall return and pay to
Leticia ₱750,000.00, which is equivalent to half of the amount
of the redemption price of the Sampaloc property; and 3) that
David shall renounce and forfeit all his rights and interest in the
conjugal and real properties situated in the Philippines.5 David
was able to collect ₱1,790,000.00 from the sale of the
Sampaloc property, leaving an unpaid balance of ₱410,000.00.
Upon learning that David had an extra-marital affair, Leticia
filed a petition for divorce with the Superior Court of California,
County of San Mateo, USA. The California court granted the
divorce on 24 June 2005 and judgment was duly entered on 29
June 2005.6 The California court granted to Leticia the custody
of her two children, as well as all the couple’s properties in the
USA.7
On 8 August 2005, Leticia filed a petition for Judicial Separation
of Conjugal Property before the RTC of Baler, Aurora. She
relied on the 3 December 2003 Joint Affidavit and David’s
failure to comply with his obligation under the same. She
prayed for: 1) the power to administer all conjugal properties in
the Philippines; 2) David and his partner to cease and desist
from selling the subject conjugal properties; 3) the declaration
that all conjugal properties be forfeited in favor of her children;
4) David to remit half of the purchase price as share of Leticia
from the sale of the Sampaloc property; and 5) the payment
of₱50,000.00 and ₱100,000.00 litigation expenses.8
In his Answer, David stated that a judgment for the dissolution
of their marriage was entered on 29 June 2005 by the Superior
Court of California, County of San Mateo. He demanded that
the conjugal partnership properties, which also include the USA
properties, be liquidated and that all expenses of liquidation,
including attorney’s fees of both parties be charged against the
conjugal partnership.9
The RTC of Baler, Aurora simplified the issues as follow:
1. Whether or not respondent David A. Noveras committed acts
of abandonment and marital infidelity which can result into the
forfeiture of the parties’ properties in favor of the petitioner
and their two (2) children.
2. Whether or not the Court has jurisdiction over the properties
in California, U.S.A. and the same can be included in the judicial
separation prayed for.
3. Whether or not the "Joint Affidavit" x x x executed by
petitioner Leticia T. Noveras and respondent David A. Noveras
will amount to a waiver or forfeiture of the latter’s property
rights over their conjugal properties.
4. Whether or not Leticia T. Noveras is entitled to
reimbursement of one half of the ₱2.2 [M]illion sales proceeds
of their property in Sampaloc, Manila and one-half of the ₱1.5
Million used to redeem the property of Atty. Isaias Noveras,
including interests and charges.
5. How the absolute community properties should be
distributed.
6. Whether or not the attorney’s fees and litigation expenses of
the parties were chargeable against their conjugal properties.
Corollary to the above is the issue of:
Whether or not the two common children of the parties are
entitled to support and presumptive legitimes.10
On 8 December 2006, the RTC rendered judgment as follows:
1. The absolute community of property of the parties is hereby
declared DISSOLVED;
2. The net assets of the absolute community of property of the
parties in the Philippines are hereby ordered to be awarded to
respondent David A. Noveras only, with the properties in the
United States of America remaining in the sole ownership of
petitioner Leticia Noveras a.k.a. Leticia Tacbiana pursuant to
the divorce decree issued by the Superior Court of California,
County of San Mateo, United States of America, dissolving the
marriage of the parties as of June 24, 2005. The titles presently
covering said properties shall be cancelled and new titles be
issued in the name of the party to whom said properties are
awarded;
3. One-half of the properties awarded to respondent David A.
Noveras in the preceding paragraph are hereby given to
Jerome and Jena, his two minor children with petitioner Leticia
Noveras a.k.a. Leticia Tacbiana as their presumptive legitimes
and said legitimes must be annotated on the titles covering the
said properties. Their share in the income from these properties
shall be remitted to them annually by the respondent within
the first half of January of each year, starting January 2008;
4. One-half of the properties in the United States of America
awarded to petitioner Leticia Noveras a.k.a. Leticia Tacbiana in
paragraph 2 are hereby given to Jerome and Jena, her two
minor children with respondent David A. Noveras as their
presumptive legitimes and said legitimes must be annotated on
the titles/documents covering the said properties. Their share
in the income from these properties, if any, shall be remitted to
them annually by the petitioner within the first half of January
of each year, starting January 2008;
5. For the support of their two (2) minor children, Jerome and
Jena, respondent David A. Noveras shall give them US$100.00
as monthly allowance in addition to their income from their
presumptive legitimes, while petitioner Leticia Tacbiana shall
take care of their food, clothing, education and other needs
while they are in her custody in the USA. The monthly
allowance due from the respondent shall be increased in the
future as the needs of the children require and his financial
capacity can afford;
6. Of the unpaid amount of ₱410,000.00 on the purchase price
of the Sampaloc property, the Paringit Spouses are hereby
ordered to pay ₱5,000.00 to respondent David A. Noveras and
₱405,000.00 to the two children. The share of the respondent
may be paid to him directly but the share of the two children
shall be deposited with a local bank in Baler, Aurora, in a joint
account tobe taken out in their names, withdrawal from which
shall only be made by them or by their representative duly
authorized with a Special Power of Attorney. Such
payment/deposit shall be made withinthe period of thirty (30)
days after receipt of a copy of this Decision, with the passbook
of the joint account to be submitted to the custody of the Clerk
of Court of this Court within the same period. Said passbook
can be withdrawn from the Clerk of Court only by the children
or their attorney-in-fact; and
7. The litigation expenses and attorney’s fees incurred by the
parties shall be shouldered by them individually.11
The trial court recognized that since the parties are US citizens,
the laws that cover their legal and perso nalstatus are those of
the USA. With respect to their marriage, the parties are
divorced by virtue of the decree of dissolution of their marriage
issued by the Superior Court of California, County of San Mateo
on 24June 2005. Under their law, the parties’ marriage had
already been dissolved. Thus, the trial court considered the
petition filed by Leticia as one for liquidation of the absolute
community of property regime with the determination of the
legitimes, support and custody of the children, instead of an
action for judicial separation of conjugal property.
With respect to their property relations, the trial court first
classified their property regime as absolute community of
property because they did not execute any marriage
settlement before the solemnization of their marriage pursuant
to Article 75 of the Family Code. Then, the trial court ruled that
in accordance with the doctrine of processual presumption,
Philippine law should apply because the court cannot take
judicial notice of the US law since the parties did not submit
any proof of their national law. The trial court held that as the
instant petition does not fall under the provisions of the law for
the grant of judicial separation of properties, the absolute
community properties cannot be forfeited in favor of Leticia
and her children. Moreover, the trial court observed that Leticia
failed to prove abandonment and infidelity with preponderant
evidence.
The trial court however ruled that Leticia is not entitled to the
reimbursements she is praying for considering that she already
acquired all of the properties in the USA. Relying still on the
principle of equity, the Court also adjudicated the Philippine
properties to David, subject to the payment of the children’s
presumptive legitimes. The trial court held that under Article 89
of the Family Code, the waiver or renunciation made by David
of his property rights in the Joint Affidavit is void.
On appeal, the Court of Appeals modified the trial court’s
Decision by directing the equal division of the Philippine
properties between the spouses. Moreover with respect to the
common children’s presumptive legitime, the appellate court
ordered both spouses to each pay their children the amount of
₱520,000.00, thus:
WHEREFORE, the instant appeal is PARTLY GRANTED.
Numbers 2, 4 and 6 of the assailed Decision dated December 8,
2006 of Branch 96, RTC of Baler, Aurora Province, in Civil Case
No. 828 are hereby MODIFIED to read as follows:
2. The net assets of the absolute community of property of the
parties in the Philippines are hereby divided equally between
petitioner Leticia Noveras a.k.a. Leticia Tacbiana (sic) and
respondent David A. Noveras;
4. One-half of the properties awarded to petitioner Leticia
Tacbiana (sic) in paragraph 2 shall pertain to her minor children,
Jerome and Jena, as their presumptive legitimes which shall be
annotated on the titles/documents covering the said
properties. Their share in the income therefrom, if any, shall be
remitted to them by petitioner annually within the first half of
January, starting 2008;
6. Respondent David A. Noveras and petitioner Leticia
Tacbiana (sic) are each ordered to pay the amount
of₱520,000.00 to their two children, Jerome and Jena, as their
presumptive legitimes from the sale of the Sampaloc property
inclusive of the receivables therefrom, which shall be deposited
to a local bank of Baler, Aurora, under a joint account in the
latter’s names. The payment/deposit shall be made within a
period of thirty (30) days from receipt of a copy of this Decision
and the corresponding passbook entrusted to the custody of
the Clerk of Court a quo within the same period, withdrawable
only by the children or their attorney-in-fact.
A number 8 is hereby added, which shall read as follows:
8. Respondent David A. Noveras is hereby ordered to pay
petitioner Leticia Tacbiana (sic) the amount of ₱1,040,000.00
representing her share in the proceeds from the sale of the
Sampaloc property.
The last paragraph shall read as follows:
Send a copy of this Decision to the local civil registry of Baler,
Aurora; the local civil registry of Quezon City; the Civil Registrar
General, National Statistics Office, Vibal Building, Times Street
corner EDSA, Quezon City; the Office of the Registry of Deeds
for the Province of Aurora; and to the children, Jerome Noveras
and Jena Noveras.
The rest of the Decision is AFFIRMED.12
In the present petition, David insists that the Court of Appeals
should have recognized the California Judgment which
awarded the Philippine properties to him because said
judgment was part of the pleading presented and offered in
evidence before the trial court. David argues that allowing
Leticia to share in the Philippine properties is tantamount to
unjust enrichment in favor of Leticia considering that the latter
was already granted all US properties by the California court.
In summary and review, the basic facts are: David and Leticia
are US citizens who own properties in the USA and in the
Philippines. Leticia obtained a decree of divorce from the
Superior Court of California in June 2005 wherein the court
awarded all the properties in the USA to Leticia. With respect
to their properties in the Philippines, Leticia filed a petition for
judicial separation of conjugal properties.
At the outset, the trial court erred in recognizing the divorce
decree which severed the bond of marriage between the
parties. In Corpuz v. Sto. Tomas,13 we stated that:
The starting point in any recognition of a foreign divorce
judgment is the acknowledgment that our courts do not take
judicial notice of foreign judgments and laws. Justice Herrera
explained that, as a rule, "no sovereign is bound to give effect
within its dominion to a judgment rendered by a tribunal of
another country." This means that the foreign judgment and its
authenticity must be proven as facts under our rules on
evidence, together with the alien’s applicable national law to
show the effect of the judgment on the alien himself or herself.
The recognition may be made in an action instituted
specifically for the purpose or in another action where a party
invokes the foreign decree as an integral aspect of his claim or
defense.14
The requirements of presenting the foreign divorce decree and
the national law of the foreigner must comply with our Rules of
Evidence. Specifically, for Philippine courts to recognize a
foreign judgment relating to the status of a marriage, a copy of
the foreign judgment may be admitted in evidence and proven
as a fact under Rule 132, Sections 24 and 25, in relation to Rule
39, Section 48(b) of the Rules of Court.15
Under Section 24 of Rule 132, the record of public documents
of a sovereign authority or tribunal may be proved by: (1) an
official publication thereof or (2) a copy attested by the officer
having the legal custody thereof. Such official publication or
copy must be accompanied, if the record is not kept in the
Philippines, with a certificate that the attesting officer has the
legal custody thereof. The certificate may be issued by any of
the authorized Philippine embassy or consular officials
stationed in the foreign country in which the record is kept, and
authenticated by the seal of his office. The attestation must
state, in substance, that the copy is a correct copy of the
original, or a specific part thereof, as the case may be, and must
be under the official seal of the attesting officer.
Section 25 of the same Rule states that whenever a copy of a
document or record is attested for the purpose of evidence, the
attestation must state, in substance, that the copy is a correct
copy of the original, or a specific part thereof, as the case may
be. The attestation must be under the official seal of the
attesting officer, if there be any, or if he be the clerk of a court
having a seal, under the seal of such court.
Based on the records, only the divorce decree was presented in
evidence. The required certificates to prove its authenticity, as
well as the pertinent California law on divorce were not
presented.
It may be noted that in Bayot v. Court of Appeals,16 we relaxed
the requirement on certification where we held that
"[petitioner therein] was clearly an American citizen when she
secured the divorce and that divorce is recognized and allowed
in any of the States of the Union, the presentation of a copy of
foreign divorce decree duly authenticated by the foreign court
issuing said decree is, as here, sufficient." In this case however,
it appears that there is no seal from the office where the
divorce decree was obtained.
Even if we apply the doctrine of processual presumption17 as
the lower courts did with respect to the property regime of the
parties, the recognition of divorce is entirely a different matter
because, to begin with, divorce is not recognized between
Filipino citizens in the Philippines. Absent a valid recognition of
the divorce decree, it follows that the parties are still legally
married in the Philippines. The trial court thus erred in
proceeding directly to liquidation.
As a general rule, any modification in the marriage settlements
must be made before the celebration of marriage. An exception
to this rule is allowed provided that the modification is judicially
approved and refers only to the instances provided in Articles
66,67, 128, 135 and 136 of the Family Code.18
Leticia anchored the filing of the instant petition for judicial
separation of property on paragraphs 4 and 6 of Article 135 of
the Family Code, to wit:
Art. 135. Any of the following shall be considered sufficient
cause for judicial separation of property:
(1) That the spouse of the petitioner has been sentenced to a
penalty which carries with it civil interdiction;
(2) That the spouse of the petitioner has been judicially
declared an absentee;
(3) That loss of parental authority of the spouse of petitioner
has been decreed by the court;
(4) That the spouse of the petitioner has abandoned the latter
or failed to comply with his or her obligations to the family as
provided for in Article 101;
(5) That the spouse granted the power of administration in the
marriage settlements has abused that power; and
(6) That at the time of the petition, the spouses have been
separated in fact for at least one year and reconciliation is
highly improbable.
In the cases provided for in Numbers (1), (2), and (3), the
presentation of the final judgment against the guiltyor absent
spouse shall be enough basis for the grant of the decree of
judicial separation of property. (Emphasis supplied).
The trial court had categorically ruled that there was no
abandonment in this case to necessitate judicial separation of
properties under paragraph 4 of Article 135 of the Family Code.
The trial court ratiocinated:
Moreover, abandonment, under Article 101 of the Family Code
quoted above, must be for a valid cause and the spouse is
deemed to have abandoned the other when he/she has left the
conjugal dwelling without intention of returning. The intention
of not returning is prima facie presumed if the allegedly [sic]
abandoning spouse failed to give any information as to his or
her whereabouts within the period of three months from such
abandonment.
In the instant case, the petitioner knows that the respondent
has returned to and stayed at his hometown in Maria Aurora,
Philippines, as she even went several times to visit him there
after the alleged abandonment. Also, the respondent has been
going back to the USA to visit her and their children until the
relations between them worsened. The last visit of said
respondent was in October 2004 when he and the petitioner
discussed the filing by the latter of a petition for dissolution of
marriage with the California court. Such turn for the worse of
their relationship and the filing of the said petition can also be
considered as valid causes for the respondent to stay in the
Philippines.19
Separation in fact for one year as a ground to grant a judicial
separation of property was not tackled in the trial court’s
decision because, the trial court erroneously treated the
petition as liquidation of the absolute community of properties.
The records of this case are replete with evidence that Leticia
and David had indeed separated for more than a year and that
reconciliation is highly improbable. First, while actual
abandonment had not been proven, it is undisputed that the
spouses had been living separately since 2003 when David
decided to go back to the Philippines to set up his own
business. Second, Leticia heard from her friends that David has
been cohabiting with Estrellita Martinez, who represented
herself as Estrellita Noveras. Editha Apolonio, who worked in
the hospital where David was once confined, testified that she
saw the name of Estrellita listed as the wife of David in the
Consent for Operation form.20 Third and more significantly,
they had filed for divorce and it was granted by the California
court in June 2005.
Having established that Leticia and David had actually
separated for at least one year, the petition for judicial
separation of absolute community of property should be
granted.
The grant of the judicial separation of the absolute community
property automatically dissolves the absolute community
regime, as stated in the 4th paragraph of Article 99 of the
Family Code, thus:
Art. 99. The absolute community terminates:
(1) Upon the death of either spouse;
(2) When there is a decree of legal separation;
(3) When the marriage is annulled or declared void; or
(4) In case of judicial separation of property during the marriage
under Articles 134 to 138. (Emphasis supplied).
Under Article 102 of the same Code, liquidation follows the
dissolution of the absolute community regime and the
following procedure should apply:
Art. 102. Upon dissolution of the absolute community regime,
the following procedure shall apply:
(1) An inventory shall be prepared, listing separately all the
properties of the absolute community and the exclusive
properties of each spouse.
(2) The debts and obligations of the absolute community shall
be paid out of its assets. In case of insufficiency of said assets,
the spouses shall be solidarily liable for the unpaid balance with
their separate properties in accordance with the provisions of
the second paragraph of Article 94.
(3) Whatever remains of the exclusive properties of the spouses
shall thereafter be delivered to each of them.
(4) The net remainder of the properties of the absolute
community shall constitute its net assets, which shall be
divided equally between husband and wife, unless a different
proportion or division was agreed upon in the marriage
settlements, or unless there has been a voluntary waiver of
such share provided in this Code. For purposes of computing
the net profits subject to forfeiture in accordance with Articles
43, No. (2) and 63, No. (2), the said profits shall be the increase
in value between the market value of the community property
at the time of the celebration of the marriage and the market
value at the time of its dissolution.
(5) The presumptive legitimes of the common children shall be
delivered upon partition, in accordance with Article 51.
community cannot be given full credence. Only the amount of
₱120,000.00 incurred in going to and from the U.S.A. may be
charged thereto. Election expenses in the amount of
₱300,000.00 when he ran as municipal councilor cannot be
allowed in the absence of receipts or at least the Statement of
Contributions and Expenditures required under Section 14 of
Republic Act No. 7166 duly received by the Commission on
Elections. Likewise, expenses incurred to settle the criminal
case of his personal driver is not deductible as the same had not
benefited the family. In sum, Leticia and David shall share
equally in the proceeds of the sale net of the amount of
₱120,000.00 or in the respective amounts of ₱1,040,000.00.

(6) Unless otherwise agreed upon by the parties, in the
partition of the properties, the conjugal dwelling and the lot on
which it is situated shall be adjudicated to the spouse with
whom the majority of the common children choose to remain.
Children below the age of seven years are deemed to have
chosen the mother, unless the court has decided otherwise. In
case there is no such majority, the court shall decide, taking
into consideration the best interests of said children. At the risk
of being repetitious, we will not remand the case to the trial
court. Instead, we shall adopt the modifications made by the
Court of Appeals on the trial court’s Decision with respect to
liquidation.
We agree with the appellate court that the Philippine courts did
not acquire jurisdiction over the California properties of David
and Leticia. Indeed, Article 16 of the Civil Code clearly states
that real property as well as personal property is subject to the
law of the country where it is situated. Thus, liquidation shall
only be limited to the Philippine properties.
We affirm the modification made by the Court of Appeals with
respect to the share of the spouses in the absolute community
properties in the Philippines, as well as the payment of their
children’s presumptive legitimes, which the appellate court
explained in this wise:
Leticia and David shall likewise have an equal share in the
proceeds of the Sampaloc property.1âwphi1 While both
claimed to have contributed to the redemption of the Noveras
property, absent a clear showing where their contributions
came from, the same is presumed to have come from the
community property. Thus, Leticia is not entitled to
reimbursement of half of the redemption money.
David's allegation that he used part of the proceeds from the
sale of the Sampaloc property for the benefit of the absolute
Under the first paragraph of Article 888 of the Civil Code, "(t)he
legitime of legitimate children and descendants consists of
one-half or the hereditary estate of the father and of the
mother." The children arc therefore entitled to half of the share
of each spouse in the net assets of the absolute community,
which shall be annotated on the titles/documents covering the
same, as well as to their respective shares in the net proceeds
from the sale of the Sampaloc property including the
receivables from Sps. Paringit in the amount of ₱410,000.00.
Consequently, David and Leticia should each pay them the
amount of ₱520,000.00 as their presumptive legitimes
therefrom.21
WHEREFORE, the petition is DENIED. The assailed Decision of
the Court of Appeals in CA G.R. CV No. 88686 is AFFIRMED.
SO ORDERED.
ORION SAVINGS BANK VS SUZUKI
BRION, J.:
Before us is the Petition for Review on Certiorari1 filed by
petitioner Orion Savings Bank (Orion) under Rule 45 of the
Rules of Court, assailing the decision2 dated August 23, 2012
and the resolution3 dated January 25, 2013 of the Court of
Appeals (CA) in CA-G.R. CV No. 94104.
The Factual Antecedents
In the first week of August 2003, respondent Shigekane Suzuki
(Suzuki), a Japanese national, met with Ms. Helen Soneja
(Soneja) to inquire about a condominium unit and a parking
slot at Cityland Pioneer, Mandaluyong City, allegedly owned by
Yung Sam Kang (Kang), a Korean national and a Special
Resident Retiree's Visa (SRRV) holder.
At the meeting, Soneja informed Suzuki that Unit No. 536
[covered by Condominium Certificate of Title (CCT) No.
18186]4 and Parking Slot No. 42 [covered by CCT No. 9118]5
were for sale for ₱3,000,000.00. Soneja likewise assured Suzuki
that the titles to the unit and the parking slot were clean. After
a brief negotiation, the parties agreed to reduce the price to
₱2,800,000.00. On August 5, 2003, Suzuki issued Kang a Bank
of the Philippine Island (BPI) Check No. 833496 for One
Hundred Thousand Pesos (₱100,000.00) as reservation fee.7
On August 21, 2003, Suzuki issued Kang another check, BPI
Check No. 83350,8 this time for ₱2,700,000.00 representing the
remaining balance of the purchase price. Suzuki and Kang then
executed a Deed of Absolute Sale dated August 26, 20039
covering Unit No. 536 and Parking Slot No. 42. Soon after,
Suzuki took possession of the condominium unit and parking
lot, and commenced the renovation of the interior of the
condominium unit.
Kang thereafter made several representations with Suzuki to
deliver the titles to the properties, which were then allegedly in
possession of Alexander Perez (Perez, Orion’s Loans Officer)
for safekeeping. Despite several verbal demands, Kang failed to
deliver the documents. Suzuki later on learned that Kang had
left the country, prompting Suzuki to verify the status of the
properties with the Mandaluyong City Registry of Deeds.
Before long, Suzuki learned that CCT No. 9118 representing the
title to the Parking Slot No. 42 contained no annotations
although it remained under the name of City land Pioneer. This
notwithstanding, City land Pioneer, through Assistant Vice
President Rosario D. Perez, certified that Kang had fully paid
the purchase price of Unit. No. 53610 and Parking Slot No.
42.11 CCT No. 18186 representing the title to the condominium
unit had no existing encumbrance, except for an annotation
under Entry No. 73321/C-10186 which provided that any
conveyance or encumbrance of CCT No. 18186 shall be subject
to approval by the Philippine Retirement Authority (PRA).
Although CCT No. 18186 contained Entry No. 66432/C-10186
dated February 2, 1999 representing a mortgage in favor of
Orion for a ₱1,000,000.00 loan, that annotation was
subsequently cancelled on June 16, 2000 by Entry No. 73232/T.
No. 10186. Despite the cancellation of the mortgage to Orion,
the titles to the properties remained in possession of Perez.
To protect his interests, Suzuki then executed an Affidavit of
Adverse Claim12 dated September 8, 2003, with the Registry of
Deeds of Mandaluyong City, annotated as Entry No. 3292/C-
No. 18186 in CCT No. 18186. Suzuki then demanded the
delivery of the titles.13 Orion, (through Perez), however,
refused to surrender the titles, and cited the need to consult
Orion’s legal counsel as its reason.
On October 14, 2003, Suzuki received a letter from Orion’s
counsel dated October 9, 2003, stating that Kang obtained
another loan in the amount of ₱1,800,000.00. When Kang
failed to pay, he executed a Dacion en Pago dated February 2,
2003, in favor of Orion covering Unit No. 536. Orion, however,
did not register the Dacion en Pago, until October 15, 2003.
On October 28, 2003, Suzuki executed an Affidavit of Adverse
Claim over Parking Slot No. 42 (covered by CCT No. 9118) and
this was annotated as Entry No. 4712/C-No. 9118 in the parking
lot’s title.
On January 27, 2004, Suzuki filed a complaint for specific
performance and damages against Kang and Orion. At the pre-
trial, the parties made the following admissions and
stipulations:
1. That as of August 26, 2003, Kang was the registered owner of
Unit No. 536 and Parking Slot No. 42;
2. That the mortgage in favor of Orion supposedly executed by
Kang, with Entry No. 66432/C-10186 dated February 2, 1999,
was subsequently cancelled by Entry No. 73232/T No. 10186
dated June 16, 2000;
3. That the alleged Dacion en Pago was never annotated in CCT
Nos. 18186 and 9118;
4. That Orion only paid the appropriate capital gains tax and
the documentary stamp tax for the alleged Dacion en Pago on
October 15, 2003;
5. That Parking Slot No. 42, covered by CCT No. 9118, was
never mortgaged to Orion; and
6. That when Suzuki bought the properties, he went to Orion to
obtain possession of the titles.
The RTC Ruling
In its decision14 dated June 29, 2009, the Regional Trial Court
(RTC), Branch 213, Mandaluyong City ruled in favor of Suzuki
and ordered Orion to deliver the CCT Nos. 18186 and 9118 to
Suzuki.
The court found that Suzuki was an innocent purchaser for
value whose rights over the properties prevailed over Orion’s.
The RTC further noted that Suzuki exerted efforts to verify the
status of the properties but he did not find any existing
encumbrance in the titles. Although Orion claims to have
purchased the property by way of a Dacion en Pago, Suzuki
only learned about it two (2) months after he bought the
properties because Orion never bothered to register or
annotate the Dacion en Pago in CCT Nos. 18186 and 9116.
The RTC further ordered Orion and Kang to jointly and
severally pay Suzuki moral damages, exemplary damages,
attorney’s fees, appearance fees, expenses for litigation and
cost of suit. Orion timely appealed the RTC decision with the
CA.
The CA Ruling
On August 23, 2012, the CA partially granted Orion’s appeal
and sustained the RTC insofar as it upheld Suzuki’s right over
the properties. The CA further noted that Entry No. 73321/C-
10186 pertaining to the withdrawal of investment of an SRRV
only serves as a warning to an SRRV holder about the
implications of a conveyance of a property investment. It
deviated from the RTC ruling, however, by deleting the award
for moral damages, exemplary damages, attorney’s fees,
expenses for litigation and cost of suit.
Orion sought a reconsideration of the CA decision but the CA
denied the motion in its January 25, 2013 resolution. Orion then
filed a petition for review on certiorari under Rule 45 with this
Court.
The Petition and Comment
Orion’s petition is based on the following grounds/arguments:
1. The Deed of Sale executed by Kang in favor of Suzuki is null
and void. Under Korean law, any conveyance of a conjugal
property should be made with the consent of both spouses;
2. Suzuki is not a buyer in good faith for he failed to check the
owner’s duplicate copies of the CCTs;
3. Knowledge of the PRA restriction under Entry No. 73321/C-
10186, which prohibits any conveyance or encumbrance of the
property investment, defeats the alleged claim of good faith by
Suzuki; and
4. Orion should not be faulted for exercising due diligence.
In his Comment,16 Suzuki asserts that the issue on spousal
consent was belatedly raised on appeal. Moreover, proof of
acquisition during the marital coverture is a condition sine qua
non for the operation of the presumption of conjugal
ownership.17 Suzuki additionally maintains that he is a
purchaser in good faith, and is thus entitled to the protection of
the law.
The Court’s Ruling
We deny the petition for lack of merit.
The Court may inquire into conclusions of fact when the
inference made is manifestly mistaken
In a Rule 45 petition, the latitude of judicial review generally
excludes a factual and evidentiary re-evaluation, and the Court
ordinarily abides by the uniform factual conclusions of the trial
court and the appellate court.18 In the present case, while the
courts below both arrived at the same conclusion, there
appears to be an incongruence in their factual findings and the
legal principle they applied to the attendant factual
circumstances. Thus, we are compelled to examine certain
factual issues in the exercise of our sound discretion to correct
any mistaken inference that may have been made.19
Philippine Law governs the transfer of real property
Orion believes that the CA erred in not ruling on the issue of
spousal consent. We cannot uphold this position, however,
because the issue of spousal consent was only raised on appeal
to the CA. It is a well-settled principle that points of law,
theories, issues, and arguments not brought to the attention of
the trial court cannot be raised for the first time on appeal and
considered by a reviewing court.20 To consider these belated
arguments would violate basic principles of fair play, justice,
and due process.
Having said these, we shall nonetheless discuss the issues
Orion belatedly raised, if only to put an end to lingering doubts
on the correctness of the denial of the present petition.
It is a universal principle that real or immovable property is
exclusively subject to the laws of the country or state where it is
located.21 The reason is found in the very nature of immovable
property — its immobility. Immovables are part of the country
and so closely connected to it that all rights over them have
their natural center of gravity there.22
Thus, all matters concerning the title and disposition of real
property are determined by what is known as the lex loci rei
sitae, which can alone prescribe the mode by which a title can
pass from one person to another, or by which an interest
therein can be gained or lost.23 This general principle includes
all rules governing the descent, alienation and transfer of
immovable property and the validity, effect and construction of
wills and other conveyances.24
This principle even governs the capacity of the person making a
deed relating to immovable property, no matter what its nature
may be. Thus, an instrument will be ineffective to transfer title
to land if the person making it is incapacitated by the lex loci rei
sitae, even though under the law of his domicile and by the law
of the place where the instrument is actually made, his capacity
is undoubted.25
On the other hand, property relations between spouses are
governed principally by the national law of the spouses.26
However, the party invoking the application of a foreign law
has the burden of proving the foreign law. The foreign law is a
question of fact to be properly pleaded and proved as the judge
cannot take judicial notice of a foreign law.27 He is presumed
to know only domestic or the law of the forum.28
To prove a foreign law, the party invoking it must present a
copy thereof and comply with Sections 24 and 25 of Rule 132 of
the Revised Rules of Court which reads:
SEC. 24. Proof of official record. — The record of public
documents referred to in paragraph (a) of Section 19, when
admissible for any purpose, may be evidenced by an official
publication thereof or by a copy attested by the officer having
the legal custody of the record, or by his deputy, and
accompanied, if the record is not kept in the Philippines, with a
certificate that such officer has the custody. If the office in
which the record is kept is in a foreign country, the certificate
may be made by a secretary of the embassy or legation, consul
general, consul, vice consul, or consular agent or by any officer
in the foreign service of the Philippines stationed in the foreign
country in which the record is kept, and authenticated by the
seal of his office. (Emphasis supplied)
SEC. 25. What attestation of copy must state. — Whenever a
copy of a document or record is attested for the purpose of the
evidence, the attestation must state, in substance, that the
copy is a correct copy of the original, or a specific part thereof,
as the case may be. The attestation must be under the official
seal of the attesting officer, if there be any, or if he be the clerk
of a court having a seal, under the seal of such court.
Accordingly, matters concerning the title and disposition of real
property shall be governed by Philippine law while issues
pertaining to the conjugal nature of the property shall be
governed by South Korean law, provided it is proven as a fact.
In the present case, Orion, unfortunately failed to prove the
South Korean law on the conjugal ownership of property. It
merely attached a "Certification from the Embassy of the
Republic of Korea"29 to prove the existence of Korean Law.
This certification, does not qualify as sufficient proof of the
conjugal nature of the property for there is no showing that it
was properly authenticated by the seal of his office, as required
under Section 24 of Rule 132.30
Accordingly, the International Law doctrine of presumed-
identity approach or processual presumption comes into play,
i.e., where a foreign law is not pleaded or, even if pleaded, is
not proven, the presumption is that foreign law is the same as
Philippine Law.31
Under Philippine Law, the phrase "Yung Sam Kang ‘married to'
Hyun Sook Jung" is merely descriptive of the civil status of
Kang.32 In other words, the import from the certificates of title
is that Kang is the owner of the properties as they are
registered in his name alone, and that he is married to Hyun
Sook Jung.
We are not unmindful that in numerous cases we have held that
registration of the property in the name of only one spouse
does not negate the possibility of it being conjugal or
community property.33 In those cases, however, there was
proof that the properties, though registered in the name of
only one spouse, were indeed either conjugal or community
properties.34 Accordingly, we see no reason to declare as
invalid Kang’s conveyance in favor of Suzuki for the supposed
lack of spousal consent.
The petitioner failed to adduce sufficient evidence to prove the
due execution of the Dacion en Pago
Article 1544 of the New Civil Code of the Philippines provides
that:
ART. 1544. If the same thing should have been sold to different
vendees, the ownership shall be transferred to the person who
may have first taken possession thereof in good faith, if it
should be movable property.
Should it be immovable property, the ownership shall belong to
the person acquiring it who in good faith first recorded it in the
Registry of Property.
Should there be no inscription, the ownership shall pertain to
the person who in good faith was first in the possession; and, in
the absence thereof, to the person who presents the oldest
title, provided there is good faith.
The application of Article 1544 of the New Civil Code
presupposes the existence of two or more duly executed
contracts of sale. In the present case, the Deed of Sale dated
August 26, 200335 between Suzuki and Kang was admitted by
Orion36 and was properly identified by Suzuki’s witness Ms.
Mary Jane Samin (Samin).37
It is not disputed, too, that the Deed of Sale dated August 26,
2003 was consummated. In a contract of sale, the seller
obligates himself to transfer the ownership of the determinate
thing sold, and to deliver the same to the buyer, who obligates
himself to pay a price certain to the seller.38 The execution of
the notarized deed of sale and the actual transfer of possession
amounted to delivery that produced the legal effect of
transferring ownership to Suzuki.39
On the other hand, although Orion claims priority in right under
the principle of prius tempore, potior jure (i.e.,first in time,
stronger in right), it failed to prove the existence and due
execution of the Dacion en Pago in its favor.
At the outset, Orion offered the Dacion en Pago as Exhibit
"5"with submarkings "5-a" to "5-c" to prove the existence of the
February 6, 2003 transaction in its Formal Offer dated July 20,
2008. Orion likewise offered in evidence the supposed
promissory note dated September 4, 2002 as Exhibit "12"to
prove the existence of the additional ₱800,000.00 loan. The
RTC, however, denied the admission of Exhibits "5" and
"12,"among others, in its order dated August 19, 2008 "since
the same [were] not identified in court by any witness."40
Despite the exclusion of its most critical documentary
evidence, Orion failed to make a tender of excluded evidence,
as provided under Section 40, Rule 132 of the Rules of Court.
For this reason alone, we are prevented from seriously
considering Exhibit "5" and its submarkings and Exhibit "12" in
the present petition.
Moreover, even if we consider Exhibit "5" and its submarkings
and Exhibit "12" in the present petition, the copious
inconsistencies and contradictions in the testimonial and
documentary evidence of Orion, militate against the conclusion
that the Dacion en Pago was duly executed. First, there appears
to be no due and demandable obligation when the Dacion en
Pago was executed, contrary to the allegations of Orion.
Orion’s witness Perez tried to impress upon the RTC that Kang
was in default in his ₱1,800,000.00 loan.
A reading of the supposed promissory note, however, shows
that there was no default to speak of when the supposed
Dacion en Pago was executed.
Based on the promissory note, Kang’s loan obligation would
mature only on August 27, 2003. Neither can Orion claim that
Kang had been in default in his installment payments because
the wordings of the promissory note provide that "[t]he
principal of this loan and its interest and other charges shall be
paid by me/us in accordance hereunder: SINGLE PAYMENT
LOANS.42 "There was thus no due and demandable loan
obligation when the alleged Dacion en Pago was executed.
Second, Perez, the supposed person who prepared the Dacion
en Pago, appears to only have a vague idea of the transaction
he supposedly prepared.
Third, the Dacion en Pago, mentioned that the ₱1,800,000.00
loan was secured by a real estate mortgage. However, no
document was ever presented to prove this real estate
mortgage aside from it being mentioned in the Dacion en Pago
itself.
Fourth,the Dacion en Pago was first mentioned only two (2)
months after Suzuki and Samin demanded the delivery of the
titles sometime in August 2003,and after Suzuki caused the
annotation of his affidavit of adverse claim. Records show that
it was only on October 9, 2003, when Orion, through its
counsel, Cristobal Balbin Mapile & Associates first spoke of the
Dacion en Pago.45 Not even Perez mentioned any Dacion en
Pago on October 1, 2003, when he personally received a letter
demanding the delivery of the titles. Instead, Perez refused to
accept the letter and opted to first consult with his lawyer.46
Notably, even the October 9, 2003 letter contained material
inconsistencies in its recital of facts surrounding the execution
of the Dacion en Pago. In particular, it mentioned that "on
[September 4, 2002], after paying the original loan, [Kang]
applied and was granted a new Credit Line Facility by [Orion] x
x x for ONE MILLION EIGHT HUNDRED THOUSAND PESOS
(₱1,800,000.00)." Perez, however, testified that there was "no
cash movement" in the original ₱1,000,000.00 loan. In his
testimony, he said:
Fifth, it is undisputed that notwithstanding the supposed
execution of the Dacion en Pago on February 2, 2003, Kang
remained in possession of the condominium unit. In fact,
nothing in the records shows that Orion even bothered to take
possession of the property even six (6) months after the
supposed date of execution of the Dacion en Pago. Kang was
even able to transfer possession of the condominium unit to
Suzuki, who then made immediate improvements thereon. If
Orion really purchased the condominium unit on February 2,
2003 and claimed to be its true owner, why did it not assert its
ownership immediately after the alleged sale took place? Why
did it have to assert its ownership only after Suzuki demanded
the delivery of the titles? These gaps have remained
unanswered and unfilled.
In Suntay v. CA,48 we held that the most prominent index of
simulation is the complete absence of an attempt on the part of
the vendee to assert his rights of ownership over the property
in question. After the sale, the vendee should have entered the
land and occupied the premises. The absence of any attempt
on the part of Orion to assert its right of dominion over the
property allegedly sold to it is a clear badge of fraud. That
notwithstanding the execution of the Dacion en Pago, Kang
remained in possession of the disputed condominium unit –
from the time of the execution of the Dacion en Pago until the
property’s subsequent transfer to Suzuki – unmistakably
strengthens the fictitious nature of the Dacion en Pago.
These circumstances, aside from the glaring inconsistencies in
the documents and testimony of Orion’s witness, indubitably
prove the spurious nature of the Dacion en Pago.
The fact that the Dacion en Pago is a notarized document does
not support the conclusion that the sale it embodies is a true
conveyance.
Public instruments are evidence of the facts that gave rise to
their execution and are to be considered as containing all the
terms of the agreement.49 While a notarized document enjoys
this presumption, "the fact that a deed is notarized is not a
guarantee of the validity of its contents."50 The presumption of
regularity of notarized documents is not absolute and may be
rebutted by clear and convincing evidence to the contrary.51
In the present case, the presumption cannot apply because the
regularity in the execution of the Dacion en Pago and the loan
documents was challenged in the proceedings below where
their prima facie validity was overthrown by the highly
questionable circumstances surrounding their execution.52
Effect of the PRA restriction on the validity of Suzuki’s title to
the property
Orion argues that the PRA restriction in CCT No. 18186 affects
the conveyance to Suzuki. In particular, Orion assails the status
of Suzuki as a purchaser in good faith in view of the express
PRA restriction contained in CCT No. 18186.53
We reject this suggested approach outright because, to our
mind, the PRA restriction cannot affect the conveyance in favor
of Suzuki. On this particular point, we concur withthe following
findings of the CA:
x x x the annotation merely serves as a warning to the owner
who holds a Special Resident Retiree’s Visa(SRRV) that he shall
lose his visa if he disposes his property which serves as his
investment in order to qualify for such status. Section 14 of the
Implementing Investment Guidelines under Rule VIII-A of the
Rules and Regulations Implementing Executive Order No. 1037,
Creating the Philippine Retirement Park System Providing
Funds Therefor and For Other Purpose ( otherwise known as
the Philippine Retirement Authority) states:
Section 14. Should the retiree-investor withdraw his
investment from the Philippines, or transfer the same to
another domestic enterprise, or sell, convey or transfer his
condominium unit or units to another person, natural or
juridical without the prior approval of the Authority, the Special
Resident Retiree’s Visa issued to him, and/or unmarried minor
child or children[,] may be cancelled or revoked by the
Philippine Government, through the appropriate government
department or agency, upon recommendation of the
Authority.54
Moreover, Orion should not be allowed to successfully assail
the good faith of Suzuki on the basis of the PRA restriction.
Orion knew of the PRA restriction when it transacted with
Kang. Incidentally, Orion admitted accommodating Kang’s
request to cancel the mortgage annotation despite the lack of
payment to circumvent the PRA restriction. Orion, thus, is
estopped from impugning the validity of the conveyance in
favor of Suzuki on the basis of the PRA restriction that Orion
itself ignored and "attempted" to circumvent.
With the conclusion that Orion failed to prove the authenticity
of the Dacion en Pago, we see no reason for the application of
the rules on double sale under Article 1544 of the New Civil
Code. Suzuki, moreover, successfully adduced sufficient
evidence to establish the validity of conveyance in his favor.
WHEREFORE, premises considered, we DENY the petition for
lack of merit. Costs against petitioner Orion Savings Bank.
SO ORDERED.
PRINCIPLE OF ABUSE OF RIGHTS
FAR EAST BANK VS PACILAN JR.
CALLEJO, SR., J.:
Before the Court is the petition for review on certiorari filed by
Far East Bank and Trust Company (now Bank of the Philippines
Islands) seeking the reversal of the Decision1 dated August 30,
2002 of the Court of Appeals (CA) in CA-G.R. CV No. 36627
which ordered it, together with its branch accountant, Roger
Villadelgado, to pay respondent Themistocles Pacilan, Jr.2 the
total sum of ₱100,000.00 as moral and exemplary damages.
The assailed decision affirmed with modification that of the
Regional Trial Court (RTC) of Negros Occidental, Bacolod City,
Branch 54, in Civil Case No. 4908. Likewise sought to be
reversed and set aside is the Resolution dated January 17, 2003
of the appellate court, denying petitioner bank’s motion for
reconsideration.
The case stemmed from the following undisputed facts:
Respondent Pacilan opened a current account with petitioner
bank’s Bacolod Branch on May 23, 1980. His account was
denominated as Current Account No. 53208 (0052-00407-4).
The respondent had since then issued several postdated checks
to different payees drawn against the said account. Sometime
in March 1988, the respondent issued Check No. 2434886 in the
amount of ₱680.00 and the same was presented for payment
to petitioner bank on April 4, 1988.
Upon its presentment on the said date, Check No. 2434886 was
dishonored by petitioner bank. The next day, or on April 5,
1988, the respondent deposited to his current account the
amount of ₱800.00. The said amount was accepted by
petitioner bank; hence, increasing the balance of the
respondent’s deposit to ₱1,051.43.
Subsequently, when the respondent verified with petitioner
bank about the dishonor of Check No. 2434866, he discovered
that his current account was closed on the ground that it was
"improperly handled." The records of petitioner bank disclosed
that between the period of March 30,
1988 and April 5, 1988, the respondent issued four checks, to
wit: Check No. 2480416 for ₱6,000.00; Check No. 2480419 for
₱50.00; Check No. 2434880 for ₱680.00 and; Check No.
2434886 for ₱680.00, or a total amount of ₱7,410.00. At the
time, however, the respondent’s current account with
petitioner bank only had a deposit of ₱6,981.43. Thus, the total
amount of the checks presented for payment on April 4, 1988
exceeded the balance of the respondent’s deposit in his
account. For this reason, petitioner bank, through its branch
accountant, Villadelgado, closed the respondent’s current
account effective the evening of April 4, 1988 as it then had an
overdraft of ₱428.57. As a consequence of the overdraft, Check
No. 2434886 was dishonored.
On April 18, 1988, the respondent wrote to petitioner bank
complaining that the closure of his account was unjustified.
When he did not receive a reply from petitioner bank, the
respondent filed with the RTC of Negros Occidental, Bacolod
City, Branch 54, a complaint for damages against petitioner
bank and Villadelgado. The case was docketed as Civil Case No.
4908. The respondent, as complainant therein, alleged that the
closure of his current account by petitioner bank was
unjustified because on the first banking hour of April 5, 1988, he
already deposited an amount sufficient to fund his checks. The
respondent pointed out that Check No. 2434886, in particular,
was delivered to petitioner bank at the close of banking hours
on April 4, 1988 and, following normal banking procedure, it
(petitioner bank) had until the last clearing hour of the
following day, or on April 5, 1988, to honor the check or return
it, if not funded. In disregard of this banking procedure and
practice, however, petitioner bank hastily closed the
respondent’s current account and dishonored his Check No.
2434886.
The respondent further alleged that prior to the closure of his
current account, he had issued several other postdated checks.
The petitioner bank’s act of closing his current account
allegedly preempted the deposits that he intended to make to
fund those checks. Further, the petitioner bank’s act exposed
him to criminal prosecution for violation of Batas Pambansa
Blg. 22.
According to the respondent, the indecent haste that attended
the closure of his account was patently malicious and intended
to embarrass him. He claimed that he is a Cashier of Prudential
Bank and Trust Company, whose branch office is located just
across that of petitioner bank, and a prominent and respected
leader both in the civic and banking communities. The alleged
malicious acts of petitioner bank besmirched the respondent’s
reputation and caused him "social humiliation, wounded
feelings, insurmountable worries and sleepless nights" entitling
him to an award of damages.
In their answer, petitioner bank and Villadelgado maintained
that the respondent’s current account was subject to petitioner
bank’s Rules and Regulations Governing the Establishment and
Operation of Regular Demand
Deposits which provide that "the Bank reserves the right to
close an account if the depositor frequently draws checks
against insufficient funds and/or uncollected deposits" and that
"the Bank reserves the right at any time to return checks of the
depositor which are drawn against insufficient funds or for any
reason."3
They showed that the respondent had improperly and
irregularly handled his current account. For example, in 1986,
the respondent’s account was overdrawn 156 times, in 1987,
117 times and in 1988, 26 times. In all these instances, the
account was overdrawn due to the issuance of checks against
insufficient funds. The respondent had also signed several
checks with a different signature from the specimen on file for
dubious reasons.
When the respondent made the deposit on April 5, 1988, it was
obviously to cover for issuances made the previous day against
an insufficiently funded account. When his Check No. 2434886
was presented for payment on April 4, 1988, he had already
incurred an overdraft; hence, petitioner bank rightfully
dishonored the same for insufficiency of funds.
After due proceedings, the court a quo rendered judgment in
favor of the respondent as it ordered the petitioner bank and
Villadelgado, jointly and severally, to pay the respondent the
amounts of ₱100,000.00 as moral damages and ₱50,000.00 as
exemplary damages and costs of suit. In so ruling, the court a
quo also cited petitioner bank’s rules and regulations which
state that "a charge of ₱10.00 shall be levied against the
depositor for any check that is taken up as a returned item due
to ‘insufficiency of funds’ on the date of receipt from the
clearing office even if said check is honored and/or covered by
sufficient deposit the following banking day." The same rules
and regulations also provide that "a check returned for
insufficiency of funds for any reason of similar import may be
subsequently recleared for one more time only, subject to the
same charges."
According to the court a quo, following these rules and
regulations, the respondent, as depositor, had the right to put
up sufficient funds for a check that was taken as a returned
item for insufficient funds the day following the receipt of said
check from the clearing office. In fact, the said check could still
be recleared for one more time. In previous instances,
petitioner bank notified the respondent when he incurred an
overdraft and he would then deposit sufficient funds the
following day to cover the overdraft. Petitioner bank thus acted
unjustifiably when it immediately closed the respondent’s
account on April 4, 1988 and deprived him of the opportunity to
reclear his check or deposit sufficient funds therefor the
following day.
As a result of the closure of his current account, several of the
respondent’s checks were subsequently dishonored and
because of this, the respondent was humiliated, embarrassed
and lost his credit standing in the business community. The
court a quo further ratiocinated that even granting arguendo
that petitioner bank had the right to close the respondent’s
account, the manner which attended the closure constituted an
abuse of the said right. Citing Article 19 of the Civil Code of the
Philippines which states that "[e]very person must, in the
exercise of his rights and in the performance of his duties, act
with justice, give everyone his due, and observe honesty and
good faith" and Article 20 thereof which states that "[e]very
person who, contrary to law, wilfully or negligently causes
damage to another, shall indemnify the latter for the same,"
the court a quo adjudged petitioner bank of acting in bad faith.
It held that, under the foregoing circumstances, the respondent
is entitled to an award of moral and exemplary damages.
The decretal portion of the court a quo’s decision reads:
WHEREFORE, PREMISES CONSIDERED, judgment is hereby
rendered:
1. Ordering the defendants [petitioner bank and Villadelgado],
jointly and severally, to pay plaintiff [the respondent] the sum
of ₱100,000.00 as moral damages;
2. Ordering the defendants, jointly and severally, to pay
plaintiff the sum of ₱50,000.00 as exemplary damages plus
costs and expenses of the suit; and
3. Dismissing [the] defendants’ counterclaim for lack of merit.
SO ORDERED.4
On appeal, the CA rendered the Decision dated August 30,
2002, affirming with modification the decision of the court a
quo.
The appellate court substantially affirmed the factual findings
of the court a quo as it held that petitioner bank unjustifiably
closed the respondent’s account notwithstanding that its own
rules and regulations allow that a check returned for
insufficiency of funds or any reason of similar import, may be
subsequently recleared for one more time, subject to standard
charges. Like the court a quo, the appellate court observed that
in several instances in previous years, petitioner bank would
inform the respondent when he incurred an overdraft and
allowed him to make a timely deposit to fund the checks that
were initially dishonored for insufficiency of funds. However, on
April 4, 1988, petitioner bank immediately closed the
respondent’s account without even notifying him that he had
incurred an overdraft. Even when they had already closed his
account on April 4, 1988, petitioner bank still accepted the
deposit that the respondent made on April 5, 1988, supposedly
to cover his checks.
Echoing the reasoning of the court a quo, the CA declared that
even as it may be conceded that petitioner bank had reserved
the right to close an account for repeated overdrafts by the
respondent, the exercise of that right must never be despotic or
arbitrary. That petitioner bank chose to close the account
outright and return the check, even after accepting a deposit
sufficient to cover the said check, is contrary to its duty to
handle the respondent’s account with utmost fidelity. The
exercise of the right is not absolute and good faith, at least, is
required. The manner by which petitioner bank closed the
account of the respondent runs afoul of Article 19 of the Civil
Code which enjoins every person, in the exercise of his rights,
"to give every one his due, and observe honesty and good
faith."
The CA concluded that petitioner bank’s precipitate and
imprudent closure of the respondent’s account had caused him,
a respected officer of several civic and banking associations,
serious anxiety and humiliation. It had, likewise, tainted his
credit standing. Consequently, the award of damages is
warranted. The CA, however, reduced the amount of damages
awarded by the court a quo as it found the same to be
excessive:
We, however, find excessive the amount of damages awarded
by the RTC. In our view the reduced amount of ₱75,000.00 as
moral damages and ₱25,000.00 as exemplary damages are in
order. Awards for damages are not meant to enrich the
plaintiff-appellee [the respondent] at the expense of
defendants-appellants [the petitioners], but to obviate the
moral suffering he has undergone. The award is aimed at the
restoration, within limits possible, of the status quo ante, and
should be proportionate to the suffering inflicted.5
The dispositive portion of the assailed CA decision reads:
WHEREFORE, the decision appealed from is hereby
AFFIRMED, subject to the MODIFICATION that the award of
moral damages is reduced to ₱75,000.00 and the award of
exemplary damages reduced to ₱25,000.00.
SO ORDERED.6
Petitioner bank sought the reconsideration of the said decision
but in the assailed Resolution dated January 17, 2003, the
appellate court denied its motion. Hence, the recourse to this
Court.
Petitioner bank maintains that, in closing the account of the
respondent in the evening of April 4, 1988, it acted in good faith
and in accordance with the rules and regulations governing the
operation of a regular demand deposit which reserves to the
bank "the right to close an account if the depositor frequently
draws checks against insufficient funds and/or uncollected
deposits." The same rules and regulations also provide that
"the depositor is not entitled, as a matter of right, to overdraw
on this deposit and the bank reserves the right at any time to
return checks of the depositor which are drawn against
insufficient funds or for any reason."
It cites the numerous instances that the respondent had
overdrawn his account and those instances where he
deliberately signed checks using a signature different from the
specimen on file. Based on these facts, petitioner bank was
constrained to close the respondent’s account for improper and
irregular handling and returned his Check No. 2434886 which
was presented to the bank for payment on April 4, 1988.
Petitioner bank further posits that there is no law or rule which
gives the respondent a legal right to make good his check or to
deposit the corresponding amount to cover said check within
24 hours after the same is dishonored or returned by the bank
for having been drawn against insufficient funds. It vigorously
denies having violated Article 19 of the Civil Code as it insists
that it acted in good faith and in accordance with the pertinent
banking rules and regulations.
The petition is impressed with merit.
A perusal of the respective decisions of the court a quo and the
appellate court show that the award of damages in the
respondent’s favor was anchored mainly on Article 19 of the
Civil Code which, quoted anew below, reads:
Art. 19. Every person must, in the exercise of his rights and in
the performance of his duties, act with justice, give everyone
his due, and observe honesty and good faith.
The elements of abuse of rights are the following: (a) the
existence of a legal right or duty; (b) which is exercised in bad
faith; and (c) for the sole intent of prejudicing or injuring
another.7 Malice or bad faith is at the core of the said
provision.8 The law always presumes good faith and any
person who seeks to be awarded damages due to acts of
another has the burden of proving that the latter acted in bad
faith or with ill-motive.9 Good faith refers to the state of the
mind which is manifested by the acts of the individual
concerned. It consists of the intention to abstain from taking an
unconscionable and unscrupulous advantage of another.10 Bad
faith does not simply connote bad judgment or simple
negligence, dishonest purpose or some moral obliquity and
conscious doing of a wrong, a breach of known duty due to
some motives or interest or ill-will that partakes of the nature
of fraud.11 Malice connotes ill-will or spite and speaks not in
response to duty. It implies an intention to do ulterior and
unjustifiable harm. Malice is bad faith or bad motive.12
Undoubtedly, petitioner bank has the right to close the account
of the respondent based on the following provisions of its Rules
and Regulations Governing the Establishment and Operation of
Regular Demand Deposits:
10) The Bank reserves the right to close an account if the
depositor frequently draws checks against insufficient funds
and/or uncollected deposits.
12) …
However, it is clearly understood that the depositor is not
entitled, as a matter of right, to overdraw on this deposit and
the bank reserves the right at any time to return checks of the
depositor which are drawn against insufficient funds or for any
other reason.
The facts, as found by the court a quo and the appellate court,
do not establish that, in the exercise of this right, petitioner
bank committed an abuse thereof. Specifically, the second and
third elements for abuse of rights are not attendant in the
present case. The evidence presented by petitioner bank
negates the existence of bad faith or malice on its part in
closing the respondent’s account on April 4, 1988 because on
the said date the same was already overdrawn. The respondent
issued four checks, all due on April 4, 1988, amounting to
₱7,410.00 when the balance of his current account deposit was
only ₱6,981.43. Thus, he incurred an overdraft of ₱428.57
which resulted in the dishonor of his Check No. 2434886.
Further, petitioner bank showed that in 1986, the current
account of the respondent was overdrawn 156 times due to his
issuance of checks against insufficient funds.13 In 1987, the said
account was overdrawn 117 times for the same reason.14
Again, in 1988, 26 times.15 There were also several instances
when the respondent issued checks deliberately using a
signature different from his specimen signature on file with
petitioner bank.16 All these circumstances taken together
justified the petitioner bank’s closure of the respondent’s
account on April 4, 1988 for "improper handling."
It is observed that nowhere under its rules and regulations is
petitioner bank required to notify the respondent, or any
depositor for that matter, of the closure of the account for
frequently drawing checks against insufficient funds. No malice
or bad faith could be imputed on petitioner bank for so acting
since the records bear out that the respondent had indeed been
improperly and irregularly handling his account not just a few
times but hundreds of times. Under the circumstances,
petitioner bank could not be faulted for exercising its right in
accordance with the express rules and regulations governing
the current accounts of its depositors. Upon the opening of his
account, the respondent had agreed to be bound by these
terms and conditions.
Neither the fact that petitioner bank accepted the deposit
made by the respondent the day following the closure of his
account constitutes bad faith or malice on the part of petitioner
bank. The same could be characterized as simple negligence by
its personnel. Said act, by itself, is not constitutive of bad faith.
The respondent had thus failed to discharge his burden of
proving bad faith on the part of petitioner bank or that it was
motivated by ill-will or spite in closing his account on April 4,
1988 and in inadvertently accepting his deposit on April 5,
1988.
Further, it has not been shown that these acts were done by
petitioner bank with the sole intention of prejudicing and
injuring the respondent. It is conceded that the respondent
may have suffered damages as a result of the closure of his
current account. However, there is a material distinction
between damages and injury. The Court had the occasion to
explain the distinction between damages and injury in this
wise:
… Injury is the illegal invasion of a legal right; damage is the
loss, hurt or harm which results from the injury; and damages
are the recompense or compensation awarded for the damage
suffered. Thus, there can be damage without injury in those
instances in which the loss or harm was not the result of a
violation of a legal duty. In such cases, the consequences must
be borne by the injured person alone, the law affords no
remedy for damages resulting from an act which does not
amount to a legal injury or wrong. These situations are often
called damnum absque injuria.
In other words, in order that a plaintiff may maintain an action
for the injuries of which he complains, he must establish that
such injuries resulted from a breach of duty which the
defendant owed to the plaintiff – a concurrence of injury to the
plaintiff and legal responsibility by the person causing it. The
underlying basis for the award of tort damages is the premise
that the individual was injured in contemplation of law. Thus,
there must first be a breach of some duty and the imposition of
UYPITCHING VS QUIAMCO
liability for that breach before damages may be awarded; and
the breach of such duty should be the proximate cause of the CORONA, J.:
injury.17
Honeste vivere, non alterum laedere et jus suum cuique
Whatever damages the respondent may have suffered as a tribuere. To live virtuously, not to injure others and to give
consequence, e.g., dishonor of his other insufficiently funded everyone his due. These supreme norms of justice are the
checks, would have to be borne by him alone. It was the underlying principles of law and order in society. We reaffirm
respondent’s repeated improper and irregular handling of his them in this petition for review on certiorari assailing the July
account which constrained petitioner bank to close the same in 26, 2000 decision1 and October 18, 2000 resolution of the
accordance with the rules and regulations governing its Court of Appeals (CA) in CA-G.R. CV No. 47571.
depositors’ current accounts. The respondent’s case is clearly
one of damnum absque injuria. In 1982, respondent Ernesto C. Quiamco was approached by
Juan Davalan,2 Josefino Gabutero and Raul Generoso to
WHEREFORE, the petition is GRANTED. The Decision dated amicably settle the civil aspect of a criminal case for robbery3
August 30, 2002 and Resolution dated January 17, 2003 of the filed by Quiamco against them. They surrendered to him a red
Court of Appeals in CA-G.R. CV No. 36627 are REVERSED AND Honda XL-100 motorcycle and a photocopy of its certificate of
SET ASIDE. registration. Respondent asked for the original certificate of
registration but the three accused never came to see him again.
SO ORDERED. Meanwhile, the motorcycle was parked in an open space inside
respondent’s business establishment, Avesco-AVNE
Enterprises, where it was visible and accessible to the public.
It turned out that, in October 1981, the motorcycle had been
sold on installment basis to Gabutero by petitioner Ramas
Uypitching Sons, Inc., a family-owned corporation managed by
petitioner Atty. Ernesto Ramas Uypitching. To secure its
payment, the motorcycle was mortgaged to petitioner
corporation.4
When Gabutero could no longer pay the installments, Davalan
assumed the obligation and continued the payments. In
September 1982, however, Davalan stopped paying the
remaining installments and told petitioner corporation’s
collector, Wilfredo Veraño, that the motorcycle had allegedly
been "taken by respondent’s men."
Nine years later, on January 26, 1991, petitioner Uypitching,
accompanied by policemen,5 went to Avesco-AVNE
Enterprises to recover the motorcycle. The leader of the police
team, P/Lt. Arturo Vendiola, talked to the clerk in charge and
asked for respondent. While P/Lt. Vendiola and the clerk were
talking, petitioner Uypitching paced back and forth inside the
establishment uttering "Quiamco is a thief of a motorcycle."
On learning that respondent was not in Avesco-AVNE
Enterprises, the policemen left to look for respondent in his
residence while petitioner Uypitching stayed in the
establishment to take photographs of the motorcycle. Unable
to find respondent, the policemen went back to Avesco-AVNE
Enterprises and, on petitioner Uypitching’s instruction and over
the clerk’s objection, took the motorcycle.
On February 18, 1991, petitioner Uypitching filed a criminal
complaint for qualified theft and/or violation of the Anti-
Fencing Law6 against respondent in the Office of the City
Prosecutor of Dumaguete City.7 Respondent moved for
dismissal because the complaint did not charge an offense as
he had neither stolen nor bought the motorcycle. The Office of
the City Prosecutor dismissed the complaint8 and denied
petitioner Uypitching’s subsequent motion for reconsideration.
Respondent filed an action for damages against petitioners in
the RTC of Dumaguete City, Negros Oriental, Branch 37.9 He
sought to hold the petitioners liable for the following: (1)
unlawful taking of the motorcycle; (2) utterance of a
defamatory remark (that respondent was a thief) and (3)
precipitate filing of a baseless and malicious complaint. These
acts humiliated and embarrassed the respondent and injured
his reputation and integrity.
On July 30, 1994, the trial court rendered a decision10 finding
that petitioner Uypitching was motivated with malice and ill
will when he called respondent a thief, took the motorcycle in
an abusive manner and filed a baseless complaint for qualified
theft and/or violation of the Anti-Fencing Law. Petitioners’ acts
were found to be contrary to Articles 1911 and 2012 of the Civil
Code. Hence, the trial court held petitioners liable to
respondent for P500,000 moral damages, P200,000 exemplary
damages and P50,000 attorney’s fees plus costs.
Petitioners appealed the RTC decision but the CA affirmed the
trial court’s decision with modification, reducing the award of
moral and exemplary damages to P300,000 and P100,000,
respectively.13 Petitioners sought reconsideration but it was
denied. Thus, this petition.
In their petition and memorandum, petitioners submit that the
sole (allegedly) issue to be resolved here is whether the filing of
a complaint for qualified theft and/or violation of the Anti-
Fencing Law in the Office of the City Prosecutor warranted the
award of moral damages, exemplary damages, attorney’s fees
and costs in favor of respondent.
Petitioners’ suggestion is misleading. They were held liable for
damages not only for instituting a groundless complaint
against respondent but also for making a slanderous remark
and for taking the motorcycle from respondent’s establishment
in an abusive manner.
Correctness of the Findings of the RTC and CA
As they never questioned the findings of the RTC and CA that
malice and ill will attended not only the public imputation of a
crime to respondent14 but also the taking of the motorcycle,
petitioners were deemed to have accepted the correctness of
such findings. This alone was sufficient to hold petitioners liable
for damages to respondent.
Nevertheless, to address petitioners’ concern, we also find that
the trial and appellate courts correctly ruled that the filing of
the complaint was tainted with malice and bad faith.
Petitioners themselves in fact described their action as a
"precipitate act."15 Petitioners were bent on portraying
respondent as a thief. In this connection, we quote with
approval the following findings of the RTC, as adopted by the
CA:
x x x There was malice or ill-will [in filing the complaint before
the City Prosecutor’s Office] because Atty. Ernesto Ramas
Uypitching knew or ought to have known as he is a lawyer, that
there was no probable cause at all for filing a criminal complaint
for qualified theft and fencing activity against [respondent].
Atty. Uypitching had no personal knowledge that [respondent]
stole the motorcycle in question. He was merely told by his bill
collector ([i.e.] the bill collector of Ramas Uypitching Sons, Inc.)
[,] Wilfredo Veraño[,] that Juan Dabalan will [no longer] pay the
remaining installment(s) for the motorcycle because the
motorcycle was taken by the men of [respondent]. It must be
noted that the term used by Wilfredo Veraño in informing Atty.
Ernesto Ramas Uypitching of the refusal of Juan Dabalan to pay
for the remaining installment was [‘]taken[’], not [‘]unlawfully
taken[’] or ‘stolen.’ Yet, despite the double hearsay, Atty.
Ernesto Ramas Uypitching not only executed the [complaint-
affidavit] wherein he named [respondent] as ‘the suspect’ of
the stolen motorcycle but also charged [respondent] of
‘qualified theft and fencing activity’ before the City
[Prosecutor’s] Office of Dumaguete. The absence of probable
cause necessarily signifies the presence of malice. What is
deplorable in all these is that Juan Dabalan, the owner of the
motorcycle, did not accuse [respondent] or the latter’s men of
stealing the motorcycle[,] much less bother[ed] to file a case
for qualified theft before the authorities. That Atty.
Uypitching’s act in charging [respondent] with qualified theft
and fencing activity is tainted with malice is also shown by his
answer to the question of Cupid Gonzaga16 [during one of their
conversations] - "why should you still file a complaint? You
have already recovered the motorcycle…"[:] "Aron motagam
ang kawatan ug motor." ("To teach a lesson to the thief of
motorcycle.")17
Moreover, the existence of malice, ill will or bad faith is a
factual matter. As a rule, findings of fact of the trial court, when
affirmed by the appellate court, are conclusive on this Court.
We see no compelling reason to reverse the findings of the RTC
and the CA.
Petitioners Abused Their Right of Recovery as Mortgagee(s)
Petitioners claim that they should not be held liable for
petitioner corporation’s exercise of its right as seller-mortgagee
to recover the mortgaged vehicle preliminary to the
enforcement of its right to foreclose on the mortgage in case of
default. They are clearly mistaken.
True, a mortgagee may take steps to recover the mortgaged
property to enable it to enforce or protect its foreclosure right
thereon. There is, however, a well-defined procedure for the
recovery of possession of mortgaged property: if a mortgagee
is unable to obtain possession of a mortgaged property for its
sale on foreclosure, he must bring a civil action either to
recover such possession as a preliminary step to the sale, or to
obtain judicial foreclosure.18
Petitioner corporation failed to bring the proper civil action
necessary to acquire legal possession of the motorcycle.
Instead, petitioner Uypitching descended on respondent’s
establishment with his policemen and ordered the seizure of
the motorcycle without a search warrant or court order. Worse,
in the course of the illegal seizure of the motorcycle, petitioner
Uypitching even mouthed a slanderous statement.
No doubt, petitioner corporation, acting through its co-
petitioner Uypitching, blatantly disregarded the lawful
procedure for the enforcement of its right, to the prejudice of
respondent. Petitioners’ acts violated the law as well as public
morals, and transgressed the proper norms of human relations.
the prejudice of respondent. Contrary to law, petitioners
willfully caused damage to respondent. Hence, they should
indemnify him.22
WHEREFORE, the petition is hereby DENIED. The July 26, 2000
decision and October 18, 2000 resolution of the Court of
Appeals in CA-G.R. CV No. 47571 are AFFIRMED.
Triple costs against petitioners, considering that petitioner
Ernesto Ramas Uypitching is a lawyer and an officer of the
court, for his improper behavior.
SO ORDERED.

The basic principle of human relations, embodied in Article 19

of the Civil Code, provides:

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

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

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

There is an abuse of right when it is exercised solely to CEBU COUNTRY CLUB VS ELIZAGAQUE
prejudice or injure another.20 The exercise of a right must be in
accordance with the purpose for which it was established and SANDOVAL-GUTIERREZ, J.:
must not be excessive or unduly harsh; there must be no
intention to harm another.21 Otherwise, liability for damages For our resolution is the instant Petition for Review on
to the injured party will attach. Certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as
amended, assailing the Decision1 dated January 31, 2003 and
In this case, the manner by which the motorcycle was taken at Resolution dated October 2, 2003 of the Court of Appeals in
petitioners’ instance was not only attended by bad faith but CA-G.R. CV No. 71506.
also contrary to the procedure laid down by law. Considered in
conjunction with the defamatory statement, petitioners’ The facts are:
exercise of the right to recover the mortgaged vehicle was Cebu Country Club, Inc. (CCCI), petitioner, is a domestic
utterly prejudicial and injurious to respondent. On the other corporation operating as a non-profit and non-stock private
hand, the precipitate act of filing an unfounded complaint could membership club, having its principal place of business in
not in any way be considered to be in accordance with the Banilad, Cebu City. Petitioners herein are members of its Board
purpose for which the right to prosecute a crime was of Directors.
established. Thus, the totality of petitioners’ actions showed a
calculated design to embarrass, humiliate and publicly ridicule Sometime in 1987, San Miguel Corporation, a special company
respondent. Petitioners acted in an excessively harsh fashion to proprietary member of CCCI, designated respondent Ricardo F.
Elizagaque, its Senior Vice President and Operations Manager
for the Visayas and Mindanao, as a special non-proprietary
member. The designation was thereafter approved by the
CCCI’s Board of Directors.
In 1996, respondent filed with CCCI an application for
proprietary membership. The application was indorsed by
CCCI’s two (2) proprietary members, namely: Edmundo T. Misa
and Silvano Ludo
As the price of a proprietary share was around the P5 million
range, Benito Unchuan, then president of CCCI, offered to sell
respondent a share for only P3.5 million. Respondent, however,
purchased the share of a certain Dr. Butalid for only P3 million.
Consequently, on September 6, 1996, CCCI issued Proprietary
Ownership Certificate No. 1446 to respondent.
During the meetings dated April 4, 1997 and May 30, 1997 of
the CCCI Board of Directors, action on respondent’s application
for proprietary membership was deferred. In another Board
meeting held on July 30, 1997, respondent’s application was
voted upon. Subsequently, or on August 1, 1997, respondent
received a letter from Julius Z. Neri, CCCI’s corporate secretary,
informing him that the Board disapproved his application for
proprietary membership.
On August 6, 1997, Edmundo T. Misa, on behalf of respondent,
wrote CCCI a letter of reconsideration. As CCCI did not answer,
respondent, on October 7, 1997, wrote another letter of
reconsideration. Still, CCCI kept silent. On November 5, 1997,
respondent again sent CCCI a letter inquiring whether any
member of the Board objected to his application. Again, CCCI
did not reply.
Consequently, on December 23, 1998, respondent filed with
the Regional Trial Court (RTC), Branch 71, Pasig City a
complaint for damages against petitioners, docketed as Civil
Case No. 67190.
After trial, the RTC rendered its Decision dated February 14,
2001 in favor of respondent, thus:
WHEREFORE, judgment is hereby rendered in favor of plaintiff:
1. Ordering defendants to pay, jointly and severally, plaintiff
the amount of P2,340,000.00 as actual or compensatory
damages.
2. Ordering defendants to pay, jointly and severally, plaintiff
the amount of P5,000,000.00 as moral damages.
3. Ordering defendants to pay, jointly and severally, plaintiff
the amount of P1,000,000.00 as exemplary damages.
4. Ordering defendants to pay, jointly and severally, plaintiff
the amount of P1,000,000.00 as and by way of attorney’s fees
and P80,000.00 as litigation expenses.
5. Costs of suit.
Counterclaims are hereby DISMISSED for lack of merit.
SO ORDERED.2
On appeal by petitioners, the Court of Appeals, in its Decision
dated January 31, 2003, affirmed the trial court’s Decision with
modification, thus:
WHEREFORE, premises considered, the assailed Decision
dated February 14, 2001 of the Regional Trial Court, Branch 71,
Pasig City in Civil Case No. 67190 is hereby AFFIRMED with
MODIFICATION as follows:
1. Ordering defendants-appellants to pay, jointly and severally,
plaintiff-appellee the amount of P2,000,000.00 as moral
damages;
2. Ordering defendants-appellants to pay, jointly and severally,
plaintiff-appellee the amount of P1,000,000.00 as exemplary
damages;
3. Ordering defendants-appellants to pay, jointly and severally,
plaintiff-appellee the mount of P500,000.00 as attorney’s fees
and P50,000.00 as litigation expenses; and
4. Costs of the suit.
The counterclaims are DISMISSED for lack of merit.
SO ORDERED.3
On March 3, 2003, petitioners filed a motion for reconsideration
and motion for leave to set the motion for oral arguments. In its
Resolution4 dated October 2, 2003, the appellate court denied
the motions for lack of merit.
Hence, the present petition.
The issue for our resolution is whether in disapproving
respondent’s application for proprietary membership with
CCCI, petitioners are liable to respondent for damages, and if
so, whether their liability is joint and several.
Petitioners contend, inter alia, that the Court of Appeals erred
in awarding exorbitant damages to respondent despite the lack
of evidence that they acted in bad faith in disapproving the
latter’s application; and in disregarding their defense of
damnum absque injuria.
For his part, respondent maintains that the petition lacks merit,
hence, should be denied.
CCCI’s Articles of Incorporation provide in part:
SEVENTH: That this is a non-stock corporation and
membership therein as well as the right of participation in its
assets shall be limited to qualified persons who are duly
accredited owners of Proprietary Ownership Certificates issued
by the corporation in accordance with its By-Laws.
Corollary, Section 3, Article 1 of CCCI’s Amended By-Laws
provides:
SECTION 3. HOW MEMBERS ARE ELECTED – The procedure
for the admission of new members of the Club shall be as
follows:
(a) Any proprietary member, seconded by another voting
proprietary member, shall submit to the Secretary a written
proposal for the admission of a candidate to the "Eligible-for-
Membership List";
(b) Such proposal shall be posted by the Secretary for a period
of thirty (30) days on the Club bulletin board during which time
any member may interpose objections to the admission of the
applicant by communicating the same to the Board of
Directors;
(c) After the expiration of the aforesaid thirty (30) days, if no
objections have been filed or if there are, the Board considers
the objections unmeritorious, the candidate shall be qualified
for inclusion in the "Eligible-for-Membership List";
(d) Once included in the "Eligible-for-Membership List" and
after the candidate shall have acquired in his name a valid POC
duly recorded in the books of the corporation as his own, he
shall become a Proprietary Member, upon a non-refundable
admission fee of P1,000.00, provided that admission fees will
only be collected once from any person.
On March 1, 1978, Section 3(c) was amended to read as follows:
(c) After the expiration of the aforesaid thirty (30) days, the
Board may, by unanimous vote of all directors present at a
regular or special meeting, approve the inclusion of the
candidate in the "Eligible-for-Membership List".
As shown by the records, the Board adopted a secret balloting
known as the "black ball system" of voting wherein each
member will drop a ball in the ballot box. A white ball
represents conformity to the admission of an applicant, while a
black ball means disapproval. Pursuant to Section 3(c), as
amended, cited above, a unanimous vote of the directors is
required. When respondent’s application for proprietary
membership was voted upon during the Board meeting on July
30, 1997, the ballot box contained one (1) black ball. Thus, for
lack of unanimity, his application was disapproved.
Obviously, the CCCI Board of Directors, under its Articles of
Incorporation, has the right to approve or disapprove an
application for proprietary membership. But such right should
not be exercised arbitrarily. Articles 19 and 21 of the Civil Code
on the Chapter on Human Relations provide restrictions, thus:
Article 19. Every person must, in the exercise of his rights and in
the performance of his duties, act with justice, give everyone
his due, and observe honesty and good faith.
Article 21. Any person who willfully causes loss or injury to
another in a manner that is contrary to morals, good customs
or public policy shall compensate the latter for the damage.
In GF Equity, Inc. v. Valenzona,5 we expounded Article 19 and
correlated it with Article 21, thus:
This article, known to contain what is commonly referred to as
the principle of abuse of rights, sets certain standards which
must be observed not only in the exercise of one's rights but
also in the performance of one's duties. These standards are
the following: to act with justice; to give everyone his due; and
to observe honesty and good faith. The law, therefore,
recognizes a primordial limitation on all rights; that in their
exercise, the norms of human conduct set forth in Article 19
must be observed. A right, though by itself legal because
recognized or granted by law as such, may nevertheless
become the source of some illegality. When a right is exercised
in a manner which does not conform with the norms enshrined
in Article 19 and results in damage to another, a legal wrong is
thereby committed for which the wrongdoer must be held
responsible. But while Article 19 lays down a rule of conduct for
the government of human relations and for the maintenance of
social order, it does not provide a remedy for its violation.
Generally, an action for damages under either Article 20 or
Article 21 would be proper.
In rejecting respondent’s application for proprietary
membership, we find that petitioners violated the rules
governing human relations, the basic principles to be observed
for the rightful relationship between human beings and for the
stability of social order. The trial court and the Court of Appeals
aptly held that petitioners committed fraud and evident bad
faith in disapproving respondent’s applications. This is contrary
to morals, good custom or public policy. Hence, petitioners are
liable for damages pursuant to Article 19 in relation to Article 21
of the same Code.
It bears stressing that the amendment to Section 3(c) of CCCI’s
Amended By-Laws requiring the unanimous vote of the
directors present at a special or regular meeting was not
printed on the application form respondent filled and
submitted to CCCI. What was printed thereon was the original
provision of Section 3(c) which was silent on the required
number of votes needed for admission of an applicant as a
proprietary member.
Petitioners explained that the amendment was not printed on
the application form due to economic reasons. We find this
excuse flimsy and unconvincing. Such amendment, aside from
being extremely significant, was introduced way back in 1978 or
almost twenty (20) years before respondent filed his
application. We cannot fathom why such a prestigious and
exclusive golf country club, like the CCCI, whose members are
all affluent, did not have enough money to cause the printing of
an updated application form.
It is thus clear that respondent was left groping in the dark
wondering why his application was disapproved. He was not
even informed that a unanimous vote of the Board members
was required. When he sent a letter for reconsideration and an
inquiry whether there was an objection to his application,
petitioners apparently ignored him. Certainly, respondent did
not deserve this kind of treatment. Having been designated by
San Miguel Corporation as a special non-proprietary member
of CCCI, he should have been treated by petitioners with
courtesy and civility. At the very least, they should have
informed him why his application was disapproved.
The exercise of a right, though legal by itself, must nonetheless
be in accordance with the proper norm. When the right is
exercised arbitrarily, unjustly or excessively and results in
damage to another, a legal wrong is committed for which the
wrongdoer must be held responsible.6 It bears reiterating that
the trial court and the Court of Appeals held that petitioners’
disapproval of respondent’s application is characterized by bad
faith.
As to petitioners’ reliance on the principle of damnum absque
injuria or damage without injury, suffice it to state that the
same is misplaced. In Amonoy v. Gutierrez,7 we held that this
principle does not apply when there is an abuse of a person’s
right, as in this case.
As to the appellate court’s award to respondent of moral
damages, we find the same in order. Under Article 2219 of the
New Civil Code, moral damages may be recovered, among
others, in acts and actions referred to in Article 21. We believe
respondent’s testimony that he suffered mental anguish, social
humiliation and wounded feelings as a result of the arbitrary
denial of his application. However, the amount of
P2,000,000.00 is excessive. While there is no hard-and-fast rule
in determining what would be a fair and reasonable amount of
moral damages, the same should not be palpably and
scandalously excessive. Moral damages are not intended to
impose a penalty to the wrongdoer, neither to enrich the
claimant at the expense of the defendant.8 Taking into
consideration the attending circumstances here, we hold that
an award to respondent of P50,000.00, instead of
P2,000,000.00, as moral damages is reasonable.
Anent the award of exemplary damages, Article 2229 allows it
by way of example or correction for the public good.
Nonetheless, since exemplary damages are imposed not to
enrich one party or impoverish another but to serve as a
deterrent against or as a negative incentive to curb socially
deleterious actions,9 we reduce the amount from
P1,000,000.00 to P25,000.00 only.
On the matter of attorney’s fees and litigation expenses, Article
2208 of the same Code provides, among others, that attorney’s
fees and expenses of litigation may be recovered in cases when
exemplary damages are awarded and where the court deems it
just and equitable that attorney’s fees and expenses of
litigation should be recovered, as in this case. In any event,
however, such award must be reasonable, just and equitable.
Thus, we reduce the amount of attorney’s fees (P500,000.00)
and litigation expenses (P50,000.00) to P50,000.00 and
P25,000.00, respectively.
Lastly, petitioners’ argument that they could not be held jointly
and severally liable for damages because only one (1) voted for
the disapproval of respondent’s application lacks merit.
Section 31 of the Corporation Code provides:
SEC. 31. Liability of directors, trustees or officers. — Directors
or trustees who willfully and knowingly vote for or assent to
patently unlawful acts of the corporation or who are guilty of
gross negligence or bad faith in directing the affairs of the
corporation or acquire any personal or pecuniary interest in
conflict with their duty as such directors, or trustees shall be
liable jointly and severally for all damages resulting therefrom
suffered by the corporation, its stockholders or members and
other persons. (Emphasis ours)

WHEREFORE, we DENY the petition. The challenged Decision

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

Costs against petitioners.

SO ORDERED.

CALATAGAN GOLF CLUB VS CLEMENTE

TINGA, J.:

Seeking the reversal of the Decision1 dated 1 June 2004 of the

Court of Appeals in CA-G.R. SP No. 62331 and the
reinstatement of the Decision dated 15 November 2000 of the
Securities and Exchange Commission (SEC) in SEC Case No. 04-
98-5954, petitioner Calatagan Golf Club, Inc. (Calatagan) filed
this Rule 45 petition against respondent Sixto Clemente, Jr.
(Clemente).

The key facts are undisputed.

Clemente applied to purchase one share of stock of Calatagan,
indicating in his application for membership his mailing address
at "Phimco Industries, Inc. – P.O. Box 240, MCC," complete
residential address, office and residence telephone numbers, as
well as the company (Phimco) with which he was connected,
Calatagan issued to him Certificate of Stock No. A-01295 on 2
May 1990 after paying ₱120,000.00 for the share.2
Calatagan charges monthly dues on its members to meet
expenses for general operations, as well as costs for upkeep
and improvement of the grounds and facilities. The provision
on monthly dues is incorporated in Calatagan’s Articles of
Incorporation and By-Laws. It is also reproduced at the back of
each certificate of stock.3 As reproduced in the dorsal side of
Certificate of Stock No. A-01295, the provision reads:
5. The owners of shares of stock shall be subject to the
payment of monthly dues in an amount as may be prescribed in
the by-laws or by the Board of Directors which shall in no case
be less that [sic] ₱50.00 to meet the expenses for the general
operations of the club, and the maintenance and improvement
of its premises and facilities, in addition to such fees as may be
charged for the actual use of the facilities x x x
When Clemente became a member the monthly charge stood
at ₱400.00. He paid ₱3,000.00 for his monthly dues on 21
March 1991 and another ₱5,400.00 on 9 December 1991. Then
he ceased paying the dues. At that point, his balance amounted
to ₱400.00.4
Ten (10) months later, Calatagan made the initial step to collect
Clemente’s back accounts by sending a demand letter dated 21
September 1992. It was followed by a second letter dated 22
October 1992. Both letters were sent to Clemente’s mailing
address as indicated in his membership application but were
sent back to sender with the postal note that the address had
been closed.5
Calatagan declared Clemente delinquent for having failed to
pay his monthly dues for more than sixty (60) days, specifically
₱5,600.00 as of 31 October 1992. Calatagan also included
Clemente’s name in the list of delinquent members posted on
the club’s bulletin board. On 1 December 1992, Calatagan’s
board of directors adopted a resolution authorizing the
foreclosure of shares of delinquent members, including
Clemente’s; and the public auction of these shares.
On 7 December 1992, Calatagan sent a third and final letter to
Clemente, this time signed by its Corporate Secretary, Atty.
Benjamin Tanedo, Jr. The letter contains a warning that unless
Clemente settles his outstanding dues, his share would be
included among the delinquent shares to be sold at public
auction on 15 January 1993. Again, this letter was sent to
Clemente’s mailing address that had already been closed.6
On 5 January 1993, a notice of auction sale was posted on the
Club’s bulletin board, as well as on the club’s premises. The
auction sale took place as scheduled on 15 January 1993, and
Clemente’s share sold for ₱64,000.7 According to the
Certificate of Sale issued by Calatagan after the sale,
Clemente’s share was purchased by a Nestor A. Virata.8 At the
time of the sale, Clemente’s accrued monthly dues amounted
to ₱5,200.00.9 A notice of foreclosure of Clemente’s share was
published in the 26 May 1993 issue of the Business World.10
Clemente learned of the sale of his share only in November of
1997.11 He filed a claim with the Securities and Exchange
Commission (SEC) seeking the restoration of his shareholding
in Calatagan with damages.
On 15 November 2000, the SEC rendered a decision dismissing
Clemente’s complaint. Citing Section 69 of the Corporation
Code which provides that the sale of shares at an auction sale
can only be questioned within six (6) months from the date of
sale, the SEC concluded that Clemente’s claim, filed four (4)
years after the sale, had already prescribed. The SEC further
held that Calatagan had complied with all the requirements for
a valid sale of the subject share, Clemente having failed to
inform Calatagan that the address he had earlier supplied was
no longer his address. Clemente, the SEC ruled, had acted in
bad faith in assuming as he claimed that his non-payment of
monthly dues would merely render his share "inactive."
Clemente filed a petition for review with the Court of Appeals.
On 1 June 2004, the Court of Appeals promulgated a decision
reversing the SEC. The appellate court restored Clemente’s one
share with a directive to Calatagan to issue in his a new share,
and awarded to Clemente a total of ₱400,000.00 in damages,
less the unpaid monthly dues of ₱5,200.00.
In rejecting the SEC’s finding that the action had prescribed,
the Court of Appeals cited the SEC’s own ruling in SEC Case No.
4160, Caram v. Valley Golf Country Club, Inc., that Section 69
of the Corporation Code specifically refers to unpaid
subscriptions to capital stock, and not to any other debt of
stockholders. With the insinuation that Section 69 does not
apply to unpaid membership dues in non-stock corporations,
the appellate court employed Article 1140 of the Civil Code as
the proper rule of prescription. The provision sets the
prescription period of actions to recover movables at eight (8)
years.
The Court of Appeals also pointed out that since that
Calatagan’s first two demand letters had been returned to it as
sender with the notation about the closure of the mailing
address, it very well knew that its third and final demand letter
also sent to the same mailing address would not be received by
Clemente. It noted the by-law requirement that within ten (10)
days after the Board has ordered the sale at auction of a
member’s share of stock for indebtedness, the Corporate
Secretary shall notify the owner thereof and advise the
Membership Committee of such fact. Finally, the Court of
Appeals ratiocinated that "a person who is in danger of the
imminent loss of his property has the right to be notified and be
given the chance to prevent the loss."12
Hence, the present appeal.
Calatagan maintains that the action of Clemente had
prescribed pursuant to Section 69 of the Corporation Code, and
that the requisite notices under both the law and the by-laws
had been rendered to Clemente.
Section 69 of the Code provides that an action to recover
delinquent stock sold must be commenced by the filing of a
complaint within six (6) months from the date of sale. As
correctly pointed out by the Court of Appeals, Section 69 is part
of Title VIII of the Code entitled "Stocks and Stockholders" and
refers specifically to unpaid subscriptions to capital stock, the
sale of which is governed by the immediately preceding Section
68.
The Court of Appeals debunked both Calatagan’s and the SEC’s
reliance on Section 69 by citing another SEC ruling in the case
of Caram v. Valley Golf. In connection with Section 69,
Calatagan raises a peripheral point made in the SEC’s Caram
ruling. In Caram, the SEC, using as take-off Section 6 of the
Corporation Code which refers to "such rights, privileges or
restrictions as may be stated in the articles of incorporation,"
pointed out that the Articles of Incorporation of Valley Golf
does not "impose any lien, liability or restriction on the Golf
Share [of Caram]," but only its (Valley Golf’s) By-Laws does.
Here, Calatagan stresses that its own Articles of Incorporation
does provide that the monthly dues assessed on owners of
shares of the corporation, along with all other obligations of
the shareholders to the club, "shall constitute a first lien on the
shares… and in the event of delinquency such shares may be
ordered sold by the Board of Directors in the manner provided
in the By-Laws to satisfy said dues or other obligations of the
shareholders."13 With its illative but incomprehensible logic,
Calatagan concludes that the prescriptive period under Section
69 should also apply to the sale of Clemente’s share as the lien
that Calatagan perceives to be a restriction is stated in the
articles of incorporation and not only in the by-laws.
We remain unconvinced.
There are fundamental differences that defy equivalence or
even analogy between the sale of delinquent stock under
Section 68 and the sale that occurred in this case. At the root of
the sale of delinquent stock is the non-payment of the
subscription price for the share of stock itself. The stockholder
or subscriber has yet to fully pay for the value of the share or
shares subscribed. In this case, Clemente had already fully paid
for the share in Calatagan and no longer had any outstanding
obligation to deprive him of full title to his share. Perhaps the
analogy could have been made if Clemente had not yet fully
paid for his share and the non-stock corporation, pursuant to an
article or by-law provision designed to address that situation,
decided to sell such share as a consequence. But that is not the
case here, and there is no purpose for us to apply Section 69 to
the case at bar.
Calatagan argues in the alternative that Clemente’s suit is
barred by Article 1146 of the Civil Code which establishes four
(4) years as the prescriptive period for actions based upon
injury to the rights of the plaintiff on the hypothesis that the
suit is purely for damages. As a second alternative still,
Calatagan posits that Clemente’s action is governed by Article
1149 of the Civil Code which sets five (5) years as the period of
prescription for all other actions whose prescriptive periods are
not fixed in the Civil Code or in any other law. Neither article is
applicable but Article 1140 of the Civil Code which provides that
an action to recover movables shall prescribe in eight (8) years.
Calatagan’s action is for the recovery of a share of stock, plus
damages.
Calatagan’s advertence to the fact that the constitution of a
lien on the member’s share by virtue of the explicit provisions in
its Articles of Incorporation and By-Laws is relevant but
ultimately of no help to its cause. Calatagan’s Articles of
Incorporation states that the "dues, together with all other
obligations of members to the club, shall constitute a first lien
on the shares, second only to any lien in favor of the national or
local government, and in the event of delinquency such shares
may be ordered sold by the Board of Directors in the manner
provided in the By-Laws to satisfy said dues or other
obligations of the stockholders."14 In turn, there are several
provisions in the By-laws that govern the payment of dues, the
lapse into delinquency of the member, and the constitution and
execution on the lien. We quote these provisions:
ARTICLE XII – MEMBER’S ACCOUNT
SEC. 31. (a) Billing Members, Posting of Delinquent Members –
The Treasurer shall bill al members monthly. As soon as
possible after the end of every month, a statement showing the
account of bill of a member for said month will be prepared and
sent to him. If the bill of any member remains unpaid by the
20th of the month following that in which the bill was incurred,
the Treasurer shall notify him that if his bill is not paid in full by
the end of the succeeding month his name will be posted as
delinquent the following day at the Clubhouse bulletin board.
While posted, a member, the immediate members of his
family, and his guests, may not avail of the facilities of the Club.
(b) Members on the delinquent list for more than 60 days shall
be reported to the Board and their shares or the shares of the
juridical entities they represent shall thereafter be ordered sold
by the Board at auction to satisfy the claims of the Club as
provided for in Section 32 hereon. A member may pay his
overdue account at any time before the auction sale.
Sec. 32. Lien on Shares; Sale of Share at Auction- The club shall
have a first lien on every share of stock to secure debts of the
members to the Club. This lien shall be annotated on the
certificates of stock and may be enforced by the Club in the
following manner:
(a) Within ten (10) days after the Board has ordered the sale at
auction of a member’s share of stock for indebtedness under
Section 31(b) hereof, the Secretary shall notify the owner
thereof, and shall advise the Membership Committee of such
fact.
(b) The Membership Committee shall then notify all applicants
on the Waiting List and all registered stockholders of the
availability of a share of stock for sale at auction at a specified
date, time and place, and shall post a notice to that effect in the
Club bulletin board for at least ten (10) days prior to the auction
sale.
(c) On the date and hour fixed, the Membership Committee
shall proceed with the auction by viva voce bidding and award
the sale of the share of stock to the highest bidder.
(d) The purchase price shall be paid by the winning bidder to
the Club within twenty-four (24) hours after the bidding. The
winning bidder or the representative in the case of a juridical
entity shall become a Regular Member upon payment of the
purchase price and issuance of a new stock certificate in his
name or in the name of the juridical entity he represents. The
proceeds of the sale shall be paid by the Club to the selling
stockholder after deducting his obligations to the Club.
(e) If no bids be received or if the winning bidder fails to pay the
amount of this bid within twenty-four (24) hours after the
bidding, the auction procedures may be repeated from time to
time at the discretion of the Membership Committee until the
share of stock be sold.
(f) If the proceeds from the sale of the share of stock are not
sufficient to pay in full the indebtedness of the member, the
member shall continue to be obligated to the Club for the
unpaid balance. If the member whose share of stock is sold fails
or refuse to surrender the stock certificate for cancellation,
cancellation shall be effected in the books of the Club based on
a record of the proceedings. Such cancellation shall render the
unsurrendered stock certificate null and void and notice to this
effect shall be duly published.
It is plain that Calatagan had endeavored to install a clear and
comprehensive procedure to govern the payment of monthly
dues, the declaration of a member as delinquent, and the
constitution of a lien on the shares and its eventual public sale
to answer for the member’s debts. Under Section 91 of the
Corporation Code, membership in a non-stock corporation
"shall be terminated in the manner and for the causes provided
in the articles of incorporation or the by-laws." The By-law
provisions are elaborate in explaining the manner and the
causes for the termination of membership in Calatagan,
through the execution on the lien of the share. The Court is
satisfied that the By-Laws, as written, affords due protection to
the member by assuring that the member should be notified by
the Secretary of the looming execution sale that would
terminate membership in the club. In addition, the By-Laws
guarantees that after the execution sale, the proceeds of the
sale would be returned to the former member after deducting
the outstanding obligations. If followed to the letter, the
termination of membership under this procedure outlined in
the By-Laws would accord with substantial justice.
Yet, did Calatagan actually comply with the by-law provisions
when it sold Clemente’s share? The appellate court’s finding on
this point warrants our approving citation, thus:
In accordance with this provision, Calatagan sent the third and
final demand letter to Clemente on December 7, 1992. The
letter states that if the amount of delinquency is not paid, the
share will be included among the delinquent shares to be sold
at public auction. This letter was signed by Atty. Benjamin
Tanedo, Jr., Calatagan Golf’s Corporate Secretary. It was again
sent to Clemente’s mailing address – Phimco Industries Inc.,
P.O. Box 240, MCC Makati. As expected, it was returned
because the post office box had been closed.
Under the By-Laws, the Corporate Secretary is tasked to "give
or cause to be given, all notices required by law or by these By-
Laws. .. and … keep a record of the addresses of all
stockholders. As quoted above, Sec. 32 (a) of the By-Laws
further provides that "within ten (10) days after the Board has
ordered the sale at auction of a member’s share of stock for
indebtedness under Section 31 (b) hereof, the Secretary shall
notify the owner thereof and shall advise the Membership
Committee of such fact.," The records do not disclose what
report the Corporate Secretary transmitted to the Membership
Committee to comply with Section 32(a). Obviously, the reason
for this mandatory requirement is to give the Membership
Committee the opportunity to find out, before the share is sold,
if proper notice has been made to the shareholder member.
We presume that the Corporate Secretary, as a lawyer is
knowledgeable on the law and on the standards of good faith
and fairness that the law requires. As custodian of corporate
records, he should also have known that the first two letters
sent to Clemente were returned because the P.O. Box had been
closed. Thus, we are surprised – given his knowledge of the law
and of corporate records – that he would send the third and
final letter – Clemente’s last chance before his share is sold and
his membership lost – to the same P.O. Box that had been
closed.
Calatagan argues that it "exercised due diligence before the
foreclosure sale" and "sent several notices to Clemente’s
specified mailing address." We do not agree; we cannot label as
due diligence Calatagan’s act of sending the December 7, 1992
letter to Clemente’s mailing address knowing fully well that the
P.O. Box had been closed. Due diligence or good faith imposes
upon the Corporate Secretary – the chief repository of all
corporate records – the obligation to check Clemente’s other
address which, under the By-Laws, have to be kept on file and
are in fact on file. One obvious purpose of giving the Corporate
Secretary the duty to keep the addresses of members on file is
specifically for matters of this kind, when the member cannot
be reached through his or her mailing address. Significantly,
the Corporate Secretary does not have to do the actual
verification of other addressees on record; a mere clerk can do
the very simple task of checking the files as in fact clerks
actually undertake these tasks. In fact, one telephone call to
Clemente’s phone numbers on file would have alerted him of
his impending loss.
Ultimately, the petition must fail because Calatagan had failed
to duly observe both the spirit and letter of its own by-laws.
The by-law provisions was clearly conceived to afford due
notice to the delinquent member of the impending sale, and
not just to provide an intricate façade that would facilitate
Calatagan’s sale of the share. But then, the bad faith on
Calatagan’s part is palpable. As found by the Court of Appeals,
Calatagan very well knew that Clemente’s postal box to which
it sent its previous letters had already been closed, yet it
persisted in sending that final letter to the same postal box.
What for? Just for the exercise, it appears, as it had known very
well that the letter would never actually reach
Clemente.1avvphi1
It is noteworthy that Clemente in his membership application
had provided his residential address along with his residence
and office telephone numbers. Nothing in Section 32 of
Calatagan’s By-Laws requires that the final notice prior to the
sale be made solely through the member’s mailing address.
Clemente cites our aphorism-like pronouncement in Rizal
Commercial Banking Corporation v. Court of Appeals15 that
"[a] simple telephone call and an ounce of good faith x x x could
have prevented this present controversy." That memorable
observation is quite apt in this case.
Calatagan’s bad faith and failure to observe its own By-Laws
had resulted not merely in the loss of Clemente’s privilege to
play golf at its golf course and avail of its amenities, but also in
significant pecuniary damage to him. For that loss, the only
blame that could be thrown Clemente’s way was his failure to
notify Calatagan of the closure of the P.O. Box. That lapse, if
we uphold Calatagan would cost Clemente a lot. But, in the first
place, does he deserve answerability for failing to notify the
club of the closure of the postal box? Indeed, knowing as he did
that Calatagan was in possession of his home address as well as
residence and office telephone numbers, he had every reason
to assume that the club would not be at a loss should it need to
contact him. In addition, according to Clemente, he was not
even aware of the closure of the postal box, the maintenance of
which was not his responsibility but his employer Phimco’s.
The utter bad faith exhibited by Calatagan brings into
operation Articles 19, 20 and 21 of the Civil Code,16 under the
Chapter on Human Relations. These provisions, which the
Court of Appeals did apply, enunciate a general obligation
under law for every person to act fairly and in good faith
towards one another. A non-stock corporation like Calatagan is
not exempt from that obligation in its treatment of its
members. The obligation of a corporation to treat every person
honestly and in good faith extends even to its shareholders or
members, even if the latter find themselves contractually
bound to perform certain obligations to the corporation. A
certificate of stock cannot be a charter of dehumanization.
We turn to the matter of damages. The award of actual
damages is of course warranted since Clemente has sustained
pecuniary injury by reason of Calatagan’s wrongful violation of
its own By-Laws. It would not be feasible to deliver Clemente’s
original Certificate of Stock because it had already been
cancelled and a new one issued in its place in the name of the
purchases at the auction who was not impleaded in this case.
However, the Court of Appeals instead directed that Calatagan
to issue to Clemente a new certificate of stock. That sufficiently
redresses the actual damages sustained by Clemente. After all,
the certificate of stock is simply the evidence of the share.
The Court of Appeals also awarded Clemente ₱200,000.00 as
moral damages, ₱100,000.00 as exemplary damages, and
₱100,000.00 as attorney’s fees. We agree that the award of
such damages is warranted.
The Court of Appeals cited Calatagan for violation of Article 32
of the Civil Code, which allows recovery of damages from any
private individual "who directly or indirectly obstructs, defeats,
violates or in any manner impedes or impairs" the right "against
deprivation of property without due process of laws." The plain
letter of the provision squarely entitles Clemente to damages
from Calatagan. Even without Article 32 itself, Calatagan will
still be bound to pay moral and exemplary damages to
Clemente. The latter was able to duly prove that he had
sustained mental anguish, serious anxiety and wounded
feelings by reason of Calatagan’s acts, thereby entitling him to
moral damages under Article 2217 of the Civil Code. Moreover,
it is evident that Calatagan’s bad faith as exhibited in the
course of its corporate actions warrants correction for the
public good, thereby justifying exemplary damages under
Article 2229 of the Civil Code. WHEREFORE, the petition is
DENIED. The Decision of the Court of Appeals is AFFIRMED.
SO ORDERED.
ARDIENTE VS JAVIER
PERALTA, J.:
Before the Court is a petition for review on certiorari under Rule
45 of the Rules of Court seeking to reverse and set aside the
Decision1 and Resolution2 of the Court of Appeals (CA), dated
August 28, 2003 and December 17, 2003, respectively, in CA-
G.R. CV No. 73000. The CA Decision affirmed with modification
the August 15, 2001 Decision3 of the Regional Trial Court (RTC)
of Cagayan de Oro City, Branch 24, while the CA Resolution
denied petitioner's Motion for Reconsideration.
The facts, as summarized by the CA, are as follows:
[Herein petitioner] Joyce V. Ardiente and her husband Dr.
Roberto S. Ardiente are owners of a housing unit at Emily
Homes, Balulang, Cagayan de Oro City with a lot area of one
hundred fifty-three (153) square meters and covered by
Transfer Certificate of Title No. 69905.
On June 2, 1994, Joyce Ardiente entered into a Memorandum
of Agreement (Exh. "B", pp. 470-473, Records) selling,
transferring and conveying in favor of [respondent] Ma.
Theresa Pastorfide all their rights and interests in the housing
unit at Emily Homes in consideration of ₱70,000.00. The
Memorandum of Agreement carries a stipulation:
"4. That the water and power bill of the subject property shall
be for the account of the Second Party (Ma. Theresa
Pastorfide) effective June 1, 1994." (Records, p. 47)
vis-a-vis Ma. Theresa Pastorfide's assumption of the payment
of the mortgage loan secured by Joyce Ardiente from the
National Home Mortgage (Records, Exh. "A", pp. 468-469)
For four (4) years, Ma. Theresa's use of the water connection in
the name of Joyce Ardiente was never questioned nor
perturbed (T.S.N., October 31, 2000, pp. 7-8) until on March 12,
1999, without notice, the water connection of Ma. Theresa was
cut off. Proceeding to the office of the Cagayan de Oro Water
District (COWD) to complain, a certain Mrs. Madjos told Ma.
Theresa that she was delinquent for three (3) months
corresponding to the months of December 1998, January 1999,
and February 1999. Ma. Theresa argued that the due date of
her payment was March 18, 1999 yet (T.S.N., October 31, 2000,
pp. 11-12). Mrs. Madjos later told her that it was at the instance
of Joyce Ardiente that the water line was cut off (T.S.N.,
February 5, 2001, p. 31).
On March 15, 1999, Ma. Theresa paid the delinquent bills
(T.S.N., October 31, 2000, p. 12). On the same date, through
her lawyer, Ma. Theresa wrote a letter to the COWD to explain
who authorized the cutting of the water line (Records, p. 160).
On March 18, 1999, COWD, through the general manager,
[respondent] Gaspar Gonzalez, Jr., answered the letter dated
March 15, 1999 and reiterated that it was at the instance of
Joyce Ardiente that the water line was cut off (Records, p. 161).
Aggrieved, on April 14, 1999, Ma. Theresa Pastorfide [and her
husband] filed [a] complaint for damages [against petitioner,
COWD and its manager Gaspar Gonzalez] (Records, pp. 2-6).
In the meantime, Ma. Theresa Pastorfide's water line was only
restored and reconnected when the [trial] court issued a writ of
preliminary mandatory injunction on December 14, 1999
(Records, p. 237).4
After trial, the RTC rendered judgment holding as follows:
In the exercise of their rights and performance of their duties,
defendants did not act with justice, gave plaintiffs their due and
observe honesty and good faith. Before disconnecting the
water supply, defendants COWD and Engr. Gaspar Gonzales
did not even send a disconnection notice to plaintiffs as
testified to by Engr. Bienvenido Batar, in-charge of the
Commercial Department of defendant COWD. There was one
though, but only three (3) days after the actual disconnection
on March 12, 1999. The due date for payment was yet on March
15. Clearly, they did not act with justice. Neither did they
observe honesty.
They should not have been swayed by the prodding of Joyce V.
Ardiente. They should have investigated first as to the present
ownership of the house. For doing the act because Ardiente
told them, they were negligent. Defendant Joyce Ardiente
should have requested before the cutting off of the water
supply, plaintiffs to pay. While she attempted to tell plaintiffs
but she did not have the patience of seeing them. She knew
that it was plaintiffs who had been using the water four (4)
years ago and not hers. She should have been very careful. x x
x5
The dispositive portion of the trial court's Decision reads, thus:
WHEREFORE, premises considered, judgment is hereby
rendered ordering defendants [Ardiente, COWD and Gonzalez]
to pay jointly and severally plaintiffs, the following sums:
(a) ₱200,000.00 for moral damages;
(b) 200,000.00 for exemplary damages; and
(c) 50,000.00 for attorney's fee.
The cross-claim of Cagayan de Oro Water District and Engr.
Gaspar Gonzales is hereby dismissed. The Court is not swayed
that the cutting off of the water supply of plaintiffs was because
they were influenced by defendant Joyce Ardiente. They were
negligent too for which they should be liable.
SO ORDERED.6
Petitioner, COWD and Gonzalez filed an appeal with the CA.
On August 28, 2003, the CA promulgated its assailed Decision
disposing as follows:
IN VIEW OF ALL THE FOREGOING, the appealed decision is
AFFIRMED, with the modification that the awarded damages is
reduced to ₱100,000.00 each for moral and exemplary
damages, while attorney's fees is lowered to ₱25,000.00. Costs
against appellants.
SO ORDERED.7
The CA ruled, with respect to petitioner, that she has a "legal
duty to honor the possession and use of water line by Ma.
Theresa Pastorfide pursuant to their Memorandum of
Agreement" and "that when [petitioner] applied for its
disconnection, she acted in bad faith causing prejudice and
[injury to] Ma. Theresa Pastorfide."8
As to COWD and Gonzalez, the CA held that they "failed to give
a notice of disconnection and derelicted in reconnecting the
water line despite payment of the unpaid bills by the
[respondent spouses Pastorfide]."9
Petitioner, COWD and Gonzalez filed their respective Motions
for Reconsideration, but these were denied by the CA in its
Resolution dated December 17, 2003.
COWD and Gonzalez filed a petition for review on certiorari
with this Court, which was docketed as G.R. No. 161802.
However, based on technical grounds and on the finding that
the CA did not commit any reversible error in its assailed
Decision, the petition was denied via a Resolution10 issued by
this Court on March 24, 2004. COWD and Gonzalez filed a
motion for reconsideration, but the same was denied with
finality through this Court's Resolution11 dated June 28, 2004.
Petitioner, on the other hand, timely filed the instant petition
with the following Assignment of Errors:
7.1 HONORABLE COURT OF APPEALS (ALTHOUGH IT HAS
REDUCED THE LIABILITY INTO HALF) HAS STILL
COMMITTED GRAVE AND SERIOUS ERROR WHEN IT
UPHELD THE JOINT AND SOLIDARY LIABILITY OF
PETITIONER JOYCE V. ARDIENTE WITH CAGAYAN DE ORO
WATER DISTRICT (COWD) AND ENGR. GASPAR D.
GONZALES FOR THE LATTER'S FAILURE TO SERVE NOTICE
UPON RESPONDENTS SPOUSES PASTORFIDE PRIOR TO
THE ACTUAL DISCONNECTION DESPITE EVIDENCE
ADDUCED DURING TRIAL THAT EVEN WITHOUT
PETITIONER'S REQUEST, COWD WAS ALREADY SET TO
EFFECT DISCONNECTION OF RESPONDENTS' WATER
SUPPLY DUE TO NON-PAYMENT OF ACCOUNT FOR THREE
(3) MONTHS.
7.2 THE HONORABLE COURT OF APPEALS COMMITTED
GRAVE AND SERIOUS ERROR WHEN IT RULED TOTALLY
AGAINST PETITIONER AND FAILED TO FIND THAT
RESPONDENTS ARE GUILTY OF CONTRIBUTORY
NEGLIGENCE WHEN THEY FAILED TO PAY THEIR WATER
BILLS FOR THREE MONTHS AND TO MOVE FOR THE
TRANSFER OF THE COWD ACCOUNT IN THEIR NAME,
WHICH WAS A VIOLATION OF THEIR MEMORANDUM OF
AGREEMENT WITH PETITIONER JOYCE V. ARDIENTE.
RESPONDENTS LIKEWISE DELIBERATELY FAILED TO
EXERCISE DILIGENCE OF A GOOD FATHER OF THE FAMILY
TO MINIMIZE THE DAMAGE UNDER ART. 2203 OF THE NEW
CIVIL CODE.
7.3 THE HONORABLE COURT OF APPEALS SERIOUSLY
ERRED WHEN IT DISREGARDED THE FACT THAT
RESPONDENT SPOUSES PASTORFIDE ARE LIKEWISE
BOUND TO OBSERVE ARTICLE 19 OF THE NEW CIVIL CODE,
i.e., IN THE EXERCISE OF THEIR RIGHTS AND IN THE
PERFORMANCE OF THEIR DUTIES TO ACT WITH JUSTICE,
GIVE EVERYONE HIS DUE AND OBSERVE HONESTY AND
GOOD FAITH.
7.4 THE HONORABLE COURT OF APPEALS GRAVELY ERRED
WHEN IT GRANTED AN AWARD OF MORAL AND
EXEMPLARY DAMAGES AND ATTORNEY'S FEES AS
AGAINST PETITIONER ARDIENTE.12
At the outset, the Court noticed that COWD and Gonzalez, who
were petitioner's co-defendants before the RTC and her co-
appellants in the CA, were impleaded as respondents in the
instant petition. This cannot be done. Being her co-parties
before the RTC and the CA, petitioner cannot, in the instant
petition for review on certiorari, make COWD and Gonzalez,
adversary parties. It is a grave mistake on the part of
petitioner's counsel to treat COWD and Gonzalez as
respondents. There is no basis to do so, considering that, in the
first place, there is no showing that petitioner filed a cross-
claim against COWD and Gonzalez. Under Section 2, Rule 9 of
the Rules of Court, a cross-claim which is not set up shall be
barred. Thus, for failing to set up a cross-claim against COWD
and Gonzalez before the RTC, petitioner is already barred from
doing so in the present petition.
More importantly, as shown above, COWD and Gonzalez's
petition for review on certiorari filed with this Court was already
denied with finality on June 28, 2004, making the presently
assailed CA Decision final and executory insofar as COWD and
Gonzalez are concerned. Thus, COWD and Gonzalez are
already precluded from participating in the present petition.
They cannot resurrect their lost cause by filing pleadings this
time as respondents but, nonetheless, reiterating the same
prayer in their previous pleadings filed with the RTC and the
CA.
As to the merits of the instant petition, the Court likewise
noticed that the main issues raised by petitioner are factual and
it is settled that the resolution of factual issues is the function
of lower courts, whose findings on these matters are received
with respect and considered binding by the Supreme Court
subject only to certain exceptions, none of which is present in
this instant petition.13 This is especially true when the findings
of the RTC have been affirmed by the CA as in this case.14
In any case, a perusal of the records at hand would readily show
that the instant petition lacks merit.
Petitioner insists that she should not be held liable for the
disconnection of respondent spouses' water supply, because
she had no participation in the actual disconnection. However,
she admitted in the present petition that it was she who
requested COWD to disconnect the Spouses Pastorfide's water
supply. This was confirmed by COWD and Gonzalez in their
cross-claim against petitioner. While it was COWD which
actually discontinued respondent spouses' water supply, it
cannot be denied that it was through the instance of petitioner
that the Spouses Pastorfide's water supply was disconnected in
the first place.
It is true that it is within petitioner's right to ask and even
require the Spouses Pastorfide to cause the transfer of the
former's account with COWD to the latter's name pursuant to
their Memorandum of Agreement. However, the remedy to
enforce such right is not to cause the disconnection of the
respondent spouses' water supply. The exercise of a right must
be in accordance with the purpose for which it was established
and must not be excessive or unduly harsh; there must be no
intention to harm another.15 Otherwise, liability for damages
to the injured party will attach.16 In the present case, intention
to harm was evident on the part of petitioner when she
requested for the disconnection of respondent spouses’ water
supply without warning or informing the latter of such request.
Petitioner claims that her request for disconnection was based
on the advise of COWD personnel and that her intention was
just to compel the Spouses Pastorfide to comply with their
agreement that petitioner's account with COWD be transferred
in respondent spouses' name. If such was petitioner's only
intention, then she should have advised respondent spouses
before or immediately after submitting her request for
disconnection, telling them that her request was simply to
force them to comply with their obligation under their
Memorandum of Agreement. But she did not. What made
matters worse is the fact that COWD undertook the
disconnection also without prior notice and even failed to
reconnect the Spouses Pastorfide’s water supply despite
payment of their arrears. There was clearly an abuse of right on
the part of petitioner, COWD and Gonzalez. They are guilty of
bad faith.
The principle of abuse of rights as enshrined in Article 19 of the
Civil Code provides that every person must, in the exercise of
his rights and in the performance of his duties, act with justice,
give everyone his due, and observe honesty and good faith.
In this regard, the Court's ruling in Yuchengco v. The Manila
Chronicle Publishing Corporation17 is instructive, to wit:
This provision of law sets standards which must be observed in
the exercise of one’s rights as well as in the performance of its
duties, to wit: to act with justice; give everyone his due; and
observe honesty and good faith.
In Globe Mackay Cable and Radio Corporation v. Court of
Appeals, it was elucidated that while Article 19 "lays down a
rule of conduct for the government of human relations and for
the maintenance of social order, it does not provide a remedy
for its violation. Generally, an action for damages under either
Article 20 or Article 21 would be proper." The Court said:
One of the more notable innovations of the New Civil Code is
the codification of "some basic principles that are to be
observed for the rightful relationship between human beings
and for the stability of the social order." [REPORT ON THE
CODE COMMISSION ON THE PROPOSED CIVIL CODE OF THE
PHILIPPINES, p. 39]. The framers of the Code, seeking to
remedy the defect of the old Code which merely stated the
effects of the law, but failed to draw out its spirit, incorporated
certain fundamental precepts which were "designed to indicate
certain norms that spring from the fountain of good
conscience" and which were also meant to serve as "guides for
human conduct [that] should run as golden threads through
society, to the end that law may approach its supreme ideal,
which is the sway and dominance of justice." (Id.) Foremost
among these principles is that pronounced in Article 19 x x x.
This article, known to contain what is commonly referred to as
the principle of abuse of rights, sets certain standards which
must be observed not only in the exercise of one's rights, but
also in the performance of one's duties. These standards are
the following: to act with justice; to give everyone his due; and
to observe honesty and good faith. The law, therefore,
recognizes a primordial limitation on all rights; that in their
exercise, the norms of human conduct set forth in Article 19
must be observed. A right, though by itself legal because
recognized or granted by law as such, may nevertheless
become the source of some illegality. When a right is exercised
in a manner which does not conform with the norms enshrined
in Article 19 and results in damage to another, a legal wrong is
thereby committed for which the wrongdoer must be held
responsible. But while Article 19 lays down a rule of conduct for
the government of human relations and for the maintenance of
social order, it does not provide a remedy for its violation.
Generally, an action for damages under either Article 20 or
Article 21 would be proper.
Corollarilly, Article 20 provides that "every person who,
contrary to law, willfully or negligently causes damage to
another shall indemnify the latter for the same." It speaks of
the general sanctions of all other provisions of law which do not
especially provide for its own sanction. When a right is
exercised in a manner which does not conform to the standards
set forth in the said provision and results in damage to another,
a legal wrong is thereby committed for which the wrongdoer
must be responsible. Thus, if the provision does not provide a
remedy for its violation, an action for damages under either
Article 20 or Article 21 of the Civil Code would be proper.
The question of whether or not the principle of abuse of rights
has been violated resulting in damages under Article 20 or
other applicable provision of law, depends on the
circumstances of each case. x x x18
To recapitulate, petitioner's acts which violated the
abovementioned provisions of law is her unjustifiable act of
having the respondent spouses' water supply disconnected,
coupled with her failure to warn or at least notify respondent
spouses of such intention. On the part of COWD and Gonzalez,
it is their failure to give prior notice of the impending
disconnection and their subsequent neglect to reconnect
respondent spouses' water supply despite the latter's
settlement of their delinquent account.
On the basis of the foregoing, the Court finds no cogent reason
to depart from the ruling of both the RTC and the CA that
petitioner, COWD and Gonzalez are solidarily liable.
The Spouses Pastorfide are entitled to moral damages based
on the provisions of Article 2219,19 in connection with Articles
2020 and 2121 of the Civil Code.
As for exemplary damages, Article 2229 provides that
exemplary damages may be imposed by way of example or
correction for the public good. Nonetheless, exemplary
damages are imposed not to enrich one party or impoverish
another, but to serve as a deterrent against or as a negative
incentive to curb socially deleterious actions.22 In the instant
case, the Court agrees with the CA in sustaining the award of
exemplary damages, although it reduced the amount granted,
considering that respondent spouses were deprived of their
water supply for more than nine (9) months, and such
deprivation would have continued were it not for the relief
granted by the RTC.
With respect to the award of attorney's fees, Article 2208 of the
Civil Code provides, among others, that such fees may be
recovered when exemplary damages are awarded, when the
defendant's act or omission has compelled the plaintiff to
litigate with third persons or to incur expenses to protect his
interest, and where the defendant acted in gross and evident
bad faith in refusing to satisfy the plaintiffs’ plainly valid, just
and demandable claim.
WHEREFORE, instant petition for review on certiorari is
DENIED. The Decision and Resolution of the Court of Appeals,
dated August 28, 2003 and December 17, 2003, respectively, in
CA-G.R. CV No. 73000 are AFFIRMED.
SO ORDERED.
SESBREÑO VS CA
BERSAMIN, J.:
This case concerns the claim for damages of petitioner Raul H.
Sesbreño founded on abuse of rights. Sesbreño accused the
violation of contract (VOC) inspection team dispatched by the
Visayan Electric Company (VECO) to check his electric meter
with conducting an unreasonable search in his residential
premises. But the Regional Trial Court (RTC), Branch 13, in
Cebu City rendered judgment on August 19, 1994 dismissing
the claim;1 and the Court of Appeals (CA) affirmed the
dismissal on March 10, 2003.2
Hence, this appeal by Sesbreño.
Antecedents
At the time material to the petition, VECO was a public utility
corporation organized and existing under the laws of the
Philippines. VECO engaged in the sale and distribution of
electricity within Metropolitan Cebu. Sesbreño was one of
VECO’s customers under the metered service contract they had
entered into on March 2, 1982.3 Respondent Vicente E. Garcia
was VECO’s President, General Manager and Chairman of its
Board of Directors. Respondent Jose E. Garcia was VECO’s
Vice-President, Treasurer and a Member of its Board of
Directors. Respondent Angelita Lhuillier was another Member
of VECO’s Board of Directors. Respondent Juan Coromina was
VECO’s Assistant Treasurer, while respondent Norberto
Abellana was the Head of VECO’s Billing Section whose main
function was to compute back billings of customers found to
have violated their contracts.
To ensure that its electric meters were properly functioning,
and that none of it meters had been tampered with, VECO
employed respondents Engr. Felipe Constantino and Ronald
Arcilla as violation of contract (VOC) inspectors.4 Respondent
Sgt. Demetrio Balicha, who belonged to the 341st Constabulary
Company, Cebu Metropolitan Command, Camp Sotero
Cabahug, Cebu City, accompanied and escorted the VOC
inspectors during their inspection of the households of its
customers on May 11, 1989 pursuant to a mission order issued
to him.5
The CA summarized the antecedent facts as follows:
x x x. Reduced to its essentials, however, the facts of this case
are actually simple enough, although the voluminous records
might indicate otherwise. It all has to do with an incident that
occurred at around 4:00 o’clock in the afternoon of May 11,
1989. On that day, the Violation of Contracts (VOC) Team of
defendants-appellees Constantino and Arcilla and their PC
escort, Balicha, conducted a routine inspection of the houses at
La Paloma Village, Labangon, Cebu City, including that of
plaintiff-appellant Sesbreño, for illegal connections, meter
tampering, seals, conduit pipes, jumpers, wiring connections,
and meter installations. After Bebe Baledio, plaintiff-appellant
Sesbreño’s maid, unlocked the gate, they inspected the electric
meter and found that it had been turned upside down.
Defendant-appellant Arcilla took photographs of the upturned
electric meter. With Chuchie Garcia, Peter Sesbreño and one of
the maids present, they removed said meter and replaced it
with a new one. At that time, plaintiff-appellant Sesbreño was
in his office and no one called to inform him of the inspection.
The VOC Team then asked for and received Chuchie Garcia’s
permission to enter the house itself to examine the kind and
number of appliances and light fixtures in the household and
determine its electrical load. Afterwards, Chuchie Garcia signed
the Inspection Division Report, which showed the condition of
the electric meter on May 11, 1989 when the VOC Team
inspected it, with notice that it would be subjected to a
laboratory test. She also signed a Load Survey Sheet that
showed the electrical load of plaintiff-appellant Sesbreño.
But according to plaintiff-appellant Sesbreño there was nothing
routine or proper at all with what the VOC Team did on May 11,
1989 in his house. Their entry to his house and the surrounding
premises was effected without his permission and over the
objections of his maids. They threatened, forced or coerced
their way into his house. They unscrewed the electric meter,
turned it upside down and took photographs thereof. They
then replaced it with a new electric meter. They searched the
house and its rooms without his permission or a search warrant.
They forced a visitor to sign two documents, making her
appear to be his representative or agent. Afterwards, he found
that some of his personal effects were missing, apparently
stolen by the VOC Team when they searched the house.6
Judgment of the RTC
On August 19, 1994, the RTC rendered judgment dismissing the
complaint.7 It did not accord credence to the testimonies of
Sesbreño’s witnesses, Bebe Baledio, his housemaid, and
Roberto Lopez, a part-time salesman, due to inconsistencies on
material points in their respective testimonies. It observed that
Baledio could not make up her mind as to whether Sesbreño’s
children were in the house when the VOC inspection team
detached and replaced the electric meter. Likewise, it
considered unbelievable that Lopez should hear the exchanges
between Constantino, Arcilla and Balicha, on one hand, and
Baledio, on the other, considering that Lopez could not even
hear the conversation between two persons six feet away from
where he was seated during the simulation done in court, the
same distance he supposedly had from the gate of Sesbreño’s
house during the incident. It pointed out that Lopez’s presence
at the gate during the incident was even contradicted by his
own testimony indicating that an elderly woman had opened
the gate for the VECO personnel, because it was Baledio, a lady
in her 20s, who had repeatedly stated on her direct and cross
examinations that she had let the VECO personnel in. It
concluded that for Lopez to do nothing at all upon seeing a
person being threatened by another in the manner he
described was simply contrary to human experience.
In contrast, the RTC believed the evidence of the respondents
showing that the VOC inspection team had found the electric
meter in Sesbreño’s residence turned upside down to prevent
the accurate registering of the electricity consumption of the
household, causing them to detach and replace the meter. It
held as unbelievable that the team forcibly entered the house
through threats and intimidation; that they themselves turned
the electric meter upside down in order to incriminate him for
theft of electricity, because the fact that the team and
Sesbreño had not known each other before then rendered it
unlikely for the team to fabricate charges against him; and that
Sesbreño’s non-presentation of Chuchie Garcia left her
allegation of her being forced to sign the two documents by the
team unsubstantiated.
Decision of the CA
Sesbreño appealed, but the CA affirmed the RTC on March 10,
2003,8 holding thusly:
x x x. plaintiff-appellant Sesbreño’s account is simply too
implausible or far-fetched to be believed. For one thing, the
inspection on his household was just one of many others that
the VOC Team had conducted in that subdivision. Yet, none
but plaintiff-appellant Sesbreño complained of the alleged acts
of the VOC Team. Considering that there is no proof that they
also perpetrated the same illegal acts on other customers in the
guise of conducting a Violation of Contracts inspection,
plaintiff-appellant Sesbreño likewise failed to show why he
alone was singled out. It is also difficult to believe that the VOC
Team would be brazen enough to want to antagonize a person
such as plaintiff-appellant Sesbreño. There is no evidence that
the VOC Team harbored any evil motive or grudge against
plaintiff-appellant Sesbreño, who is a total stranger to them.
Until he came along, they did not have any prior criminal
records to speak of, or at least, no evidence thereof was
presented. It is equally difficult to believe that their superiors
would authorize or condone their alleged illegal acts. Especially
so since there is no indication that prior to the incident on May
11, 1989, there was already bad blood or animosity between
plaintiff-appellant Sesbreño and defendant appellees to
warrant such a malevolent response. In fact, since availing of
defendant-appellee VECO’s power services, the relationship
between them appears to have been uneventful.
It becomes all the more apparent that the charges stemming
from the May 11, 1989 incident were fabricated when taken
together with the lower court’s evaluation of the alleged theft
of plaintiff-appellant Sesbreño’s personal effects. It stated that
on August 8, 1989, plaintiff-appellant Sesbreño wrote the
barangay captain of Punta Princesa and accused Chuchie
Garcia and Victoria Villarta alias Victoria Rocamora of theft of
some of his things that earlier he claimed had been stolen by
members of the VOC Team. When he was confronted with
these facts, plaintiff-appellant Sesbreño further claimed that
the items allegedly stolen by Chuchie Garcia were part of the
loot taken by defendants-appellees Constantino and Arcilla.
Yet not once did plaintiff-appellant Sesbreño or any of his
witnesses mention that a conspiracy existed between these
people. Clearly, much like his other allegations, it is nothing
more than an afterthought by plaintiff-appellant Sesbreño.
All in all, the allegations against defendants-appellees appear
to be nothing more than a put-on to save face. For the simple
truth is that the inspection exposed plaintiff-appellant
Sesbreño as a likely cheat and thief.
Neither is this Court swayed by the testimonies of Baledio and
Lopez.1âwphi1 The lower court rightly described their
testimonies as fraught by discrepancies and inconsistencies on
material points and even called Lopez a perjured witness. On
the other hand, it is odd that plaintiff-appellant Sesbreño chose
not to present the witness whose testimony was very crucial.
But even though Chuchie Garcia never testified, her absence
speaks volumes. Whereas plaintiff-appellant Sesbreño claimed
that the VOC Team forced her to sign two documents that
made her appear to be his authorized agent or representative,
the latter claimed otherwise and that she also gave them
permission to enter and search the house. The person most
qualified to refute the VOC Team’s claim is Chuchie Garcia
herself. It is axiomatic that he who asserts a fact or claim must
prove it. He cannot transfer that burden to the person against
whom he asserts such fact or claim. When certain evidence is
suppressed, the presumption is that it will adversely affect the
cause of the party suppressing it, should it come to light. x x x9
Upon denial of his motion for reconsideration,10 Sesbreño
appealed.
Issue
Was Sesbreño entitled to recover damages for abuse of rights?
Ruling
The appeal has no merit.
Sesbreño’s main contention is that the inspection of his
residence by the VOC team was an unreasonable search for
being carried out without a warrant and for being allegedly
done with malice or bad faith.
Before dealing with the contention, we have to note that two
distinct portions of Sesbreño’s residence were inspected by the
VOS team – the garage where the electric meter was installed,
and the main premises where the four bedrooms, living rooms,
dining room and kitchen were located.
Anent the inspection of the garage where the meter was
installed, the respondents assert that the VOC team had the
continuing authority from Sesbreño as the consumer to enter
his premises at all reasonable hours to conduct an inspection of
the meter without being liable for trespass to dwelling. The
authority emanated from paragraph 9 of the metered service
contract entered into between VECO and each of its
consumers, which provided as follows:
9. The CONSUMER agrees to allow properly authorized
employees or representatives of the COMPANY to enter his
premises at all reasonable hours without being liable to
trespass to dwelling for the purpose of inspecting, installing,
reading, removing, testing, replacing or otherwise disposing of
its property, and/or removing the COMPANY’S property in the
event of the termination of the contract for any cause.11
Sesbreño contends, however, that paragraph 9 did not give
Constantino, Arcilla and Balicha the blanket authority to enter
at will because the only property VECO owned in his premises
was the meter; hence, Constantino and Arcilla should enter
only the garage. He denies that they had the right to enter the
main portion of the house and inspect the various rooms and
the appliances therein because those were not the properties of
VECO. He posits that Balicha, who was not an employee of
VECO, had no authority whatsoever to enter his house and
conduct a search. He concludes that their search was
unreasonable, and entitled him to damages in light of their
admission that they had entered and inspected his premises
without a search warrant.12
We do not accept Sesbreño’s conclusion.1avvphi1 Paragraph 9
clothed the entire VOC team with unquestioned authority to
enter the garage to inspect the meter. The members of the
team obviously met the conditions imposed by paragraph 9 for
an authorized entry. Firstly, their entry had the objective of
conducting the routine inspection of the meter.13 Secondly,
the entry and inspection were confined to the garage where the
meter was installed.14 Thirdly, the entry was effected at
around 4 o’clock p.m., a reasonable hour.15 And, fourthly, the
persons who inspected the meter were duly authorized for the
purpose by VECO.
Although Balicha was not himself an employee of VECO,16 his
participation was to render police assistance to ensure the
personal security of Constantino and Arcilla during the
inspection, rendering him a necessary part of the team as an
authorized representative. Under the circumstances, he was
authorized to enter considering that paragraph 9 expressly
extended such authority to "properly authorized employees or
representatives" of VECO.
It is true, as Sesbreño urges, that paragraph 9 did not cover the
entry into the main premises of the residence. Did this
necessarily mean that any entry by the VOS team into the main
premises required a search warrant to be first secured?
Sesbreño insists so, citing Section 2, Article III of the 1987
Constitution, the clause guaranteeing the right of every
individual against unreasonable searches and seizures, viz:
Section 2. The right of the people to be secure in their persons,
houses, papers and effects against unreasonable searches and
seizures of whatever nature and for any purpose shall be
inviolable, and no search warrant or warrant of arrest shall issue
except upon probable cause to be determined personally by the
judge after examination under oath or affirmation of the
complainant and the witnesses he may produce, and
particularly describing the place to be searched and the persons
or things to be seized.
He states that a violation of this constitutional guaranty
rendered VECO and its VOS team liable to him for damages by
virtue of Article 32 (9) of the Civil Code, which pertinently
provides:
Article 32. Any public officer or employee, or any private
individual, who directly or indirectly obstructs, defeats, violates
or in any manner impedes or impairs any of the following rights
and liberties of another person shall be liable to the latter for
damages:
(9) The right to be secured in one’s person, house, papers, and
effects against unreasonable searches and seizures;
Sesbreño’s insistence has no legal and factual basis.
The constitutional guaranty against unlawful searches and
seizures is intended as a restraint against the Government and
its agents tasked with law enforcement. It is to be invoked only
to ensure freedom from arbitrary and unreasonable exercise of
State power. The Court has made this clear in its
pronouncements, including that made in People v. Marti,17 viz:
If the search is made upon the request of law enforcers, a
warrant must generally be first secured if it is to pass the test of
constitutionality. However, if the search is made at the behest
or initiative of the proprietor of a private establishment for its
own and private purposes, as in the case at bar, and without the
intervention of police authorities, the right against
unreasonable search and seizure cannot be invoked for only the
act of private individual, not the law enforcers, is involved. In
sum, the protection against unreasonable searches and
seizures cannot be extended to acts committed by private
individuals so as to bring it within the ambit of alleged unlawful
intrusion by the government.18
It is worth noting that the VOC inspectors decided to enter the
main premises only after finding the meter of Sesbreño turned
upside down, hanging and its disc not rotating. Their doing so
would enable them to determine the unbilled electricity
consumed by his household. The circumstances justified their
decision, and their inspection of the main premises was a
continuation of the authorized entry. There was no question
then that their ability to determine the unbilled electricity
called for them to see for themselves the usage of electricity
inside. Not being agents of the State, they did not have to first
obtain a search warrant to do so.
Balicha’s presence participation in the entry did not make the
inspection a search by an agent of the State within the ambit of
the guaranty. As already mentioned, Balicha was part of the
team by virtue of his mission order authorizing him to assist
and escort the team during its routine inspection.19
Consequently, the entry into the main premises of the house by
the VOC team did not constitute a violation of the guaranty.
Our holding could be different had Sesbreño persuasively
demonstrated the intervention of malice or bad faith on the
part of Constantino and Arcilla during their inspection of the
main premises, or any excessiveness committed by them in the
course of the inspection. But Sesbreño did not. On the other
hand, the CA correctly observed that the inspection did not
zero in on Sesbreño’s residence because the other houses
within the area were similarly subjected to the routine
inspection.20 This, we think, eliminated any notion of malice or
bad faith.
Clearly, Sesbreño did not establish his claim for damages if the
respondents were not guilty of abuse of rights. To stress, the
concept of abuse of rights prescribes that a person should not
use his right unjustly or in bad faith; otherwise, he may be liable
to another who suffers injury. The rationale for the concept is
to present some basic principles to be followed for the rightful
relationship between human beings and the stability of social
order.21 Moreover, according to a commentator,22 "the
exercise of right ends when the right disappears, and it
disappears when it is abused, especially to the prejudice of
others[;] [i]t cannot be said that a person exercises a right when
he unnecessarily prejudices another." Article 19 of the Civil
Code23 sets the standards to be observed in the exercise of
one’s rights and in the performance of one’s duties, namely: (a)
to act with justice; (b) to give everyone his due; and (c) to
observe honesty and good faith. The law thereby recognizes
the primordial limitation on all rights – that in the exercise of
the rights, the standards under Article 19 must be observed.24
Although the act is not illegal, liability for damages may arise
should there be an abuse of rights, like when the act is
performed without prudence or in bad faith. In order that
liability may attach under the concept of abuse of rights, the
following elements must be present, to wit: (a) the existence of
a legal right or duty, (b) which is exercised in bad faith, and (c)
for the sole intent of prejudicing or injuring another.25 There is
no hard and fast rule that can be applied to ascertain whether
or not the principle of abuse of rights is to be invoked. The
resolution of the issue depends on the circumstances of each
case.
Sesbreño asserts that he did not authorize Baledio or Chuchie
Garcia to let anyone enter his residence in his absence; and that
Baledio herself confirmed that the members of the VOC team
had intimidated her into letting them in.
The assertion of Sesbreño is improper for consideration in this
appeal.1âwphi1 The RTC and the CA unanimously found the
testimonies of Sesbreño’s witnesses implausible because of
inconsistencies on material points; and even declared that the
non-presentation of Garcia as a witness was odd if not suspect.
Considering that such findings related to the credibility of the
witnesses and their testimonies, the Court cannot review and
undo them now because it is not a trier of facts, and is not also
tasked to analyze or weigh evidence all over again.26 Verily, a
review that may tend to supplant the findings of the trial court
that had the first-hand opportunity to observe the demeanor of
the witnesses themselves should be undertaken by the Court
with prudent hesitation. Only when Sesbreño could make a
clear showing of abuse in their appreciation of the evidence and
records by the trial and the appellate courts should the Court
do the unusual review of the factual findings of the trial and
appellate courts.27 Alas, that showing was not made here.
Nor should the Court hold that Sesbreño was denied due
process by the refusal of the trial judge to inhibit from the case.
Although the trial judge had issued an order for his voluntary
inhibition, he still rendered the judgment in the end in
compliance with the instruction of the Executive Judge, whose
exercise of her administrative authority on the matter of the
inhibition should be respected.28 In this connection, we find to
be apt the following observation of the CA, to wit:
x x x. Both Judge Paredes and Judge Priscila Agana serve the
Regional Trial Court and are therefore of co-equal rank. The
latter has no authority to reverse or modify the orders of Judge
Paredes. But in ordering Judge Paredes to continue hearing the
case, Judge Agana did not violate their co-equal status or
unilaterally increased her jurisdiction. It is merely part of her
administrative responsibilities as Executive Judge of the
Regional Trial Court of Cebu City, of which Judge Paredes is
also a member.29
Lastly, the Court finds nothing wrong if the writer of the
decision in the CA refused to inhibit from participating in the
resolution of the motion for reconsideration filed by Sesbrefio.
The motion for her inhibition was grounded on suspicion of her
bias and prejudice,30 but suspicion of bias and prejudice were
not enough grounds for inhibition.31
Suffice it to say that the records are bereft of any indication
that even suggested that the Associate Justices of the CA who
participated in the promulgation of the decision were tainted
with bias against him.
WHEREFORE, the Court DENIES the pet1t1on for review on
certiorari; AFFIRMS the decision promulgated on March 10,
2003; and DIRECTS the petitioner to pay the costs of suit.
SO ORDERED.
SALADAGA VS ASTORGA
LEONARDO-DE CASTRO, J.:
Membership in the legal profession is a high personal privilege
burdened with conditions,1 including continuing fidelity to the
law and constant possession of moral fitness. Lawyers, as
guardians of the law, play a vital role in the preservation of
society, and a consequent obligation of lawyers is to maintain
the highest standards of ethical conduct.2 Failure to live by the
standards of the legal profession and to discharge the burden
of the privilege conferred on one as a member of the bar
warrant the suspension or revocation of that privilege.
The Factual Antecedents
Complainant Florencio A. Saladaga and respondent Atty.
Arturo B. Astorga entered into a "Deed of Sale with Right to
Repurchase" on December 2, 1981 where respondent sold (with
rightof repurchase) to complainant a parcel of coconut land
located at Barangay Bunga, Baybay, Leyte covered by Transfer
Certificate of Title (TCT) No. T-662 for ₱15,000.00. Under the
said deed, respondent represented that he has "the perfect
right to dispose as owner in fee simple" the subject property
and that the said property is "free from all liens and
encumbrances."3 The deed also provided that respondent, as
vendor a retro, had two years within which to repurchase the
property, and if not repurchased within the said period, "the
parties shall renew [the] instrument/agreement."4
Respondent failed to exercise his right of repurchase within the
period provided in the deed, and no renewal of the contract
was made even after complainant sent respondent a final
demand dated May 10, 1984 for the latter to repurchase the
property. Complainant remained in peaceful possession of the
property until December 1989 when he received letters from
the Rural Bank of Albuera (Leyte), Inc. (RBAI) informing him
that the property was mortgaged by respondent to RBAI, that
the bank had subsequently foreclosed on the property, and
that complainant should therefore vacate the property.5
Complainant was alarmed and made aninvestigation. He
learned the following:
(1) TCT No. T-662 was already cancelled by TCT No. T-3211 in
the name of Philippine National Bank (PNB) as early as
November 17, 1972 after foreclosure proceedings;
(2) TCT No. T-3211 was cancelled by TCT No. T-7235 in the
names of respondent and his wife on January 4, 1982 pursuant
to a deed of sale dated March 27,1979 between PNB and
respondent;
(3) Respondent mortgaged the subject property to RBAI on
March 14, 1984, RBAI foreclosed on the property, and
subsequently obtained TCT No. TP-10635 on March 27, 1991.6
Complainant was subsequently dispossessed of the property by
RBAI.7
Aggrieved, complainant instituted a criminal complaint for
estafa against respondent with the Office of the Provincial
Prosecutor of Leyte, docketed as I.S. No. 95-144. The Provincial
Prosecutor of Leyte approved the Resolution8 dated April 21,
1995 in I.S. No. 95-144 finding that "[t]he facts of [the] case are
sufficient to engender a well-founded belief that Estafa x x x
has been committed and that respondent herein is probably
guilty thereof."9 Accordingly, an Information10 dated January
8,1996 was filed before the Municipal Trial Court (MTC) of
Baybay, Leyte, formally charging respondent with the crime of
estafa under Article 316, paragraphs 1 and 2 of the Revised
Penal Code,11 committed as follows:
On March 14, 1984, accused representing himself as the owner
of a parcel of land known as Lot No. 7661 of the Baybay
Cadastre, mortgaged the same to the Rural Bank of Albuera,
Albuera, Leyte, within the jurisdiction of this Honorable Court,
knowing fully well that the possessor and owner at that time
was private complainant Florencio Saladaga by virtue of a
Pacto de Retro Sale which accused executed in favor of private
complainant on 2nd December, 1981, without first
redeeming/repurchasing the same. [P]rivate complainant
knowing of accused[’s] unlawful act only on or about the last
week of February, 1991 when the rural bank dispossessed him
of the property, the mortgage having been foreclosed, private
complainant thereby suffered damages and was prejudiced by
accused[’s] unlawful transaction and misrepresentation.
The aforementioned estafa case against respondent was
docketed as Criminal Case No. 3112-A.
Complainant likewise instituted the instant administrative
cases against respondent by filing before this Court an
Affidavit-Complaint12 dated January 28, 1997 and
Supplemental Complaint13 dated February 27, 1997, which
were docketed as A.C. No. 4697 and A.C. No. 4728,
respectively. In both complaints, complainant sought the
disbarment of respondent.
The administrative cases were referred to the Integrated Bar of
the Philippines (IBP) for investigation, report and
recommendation.14
In his Consolidated Answer15 dated August 16, 2003 filed
before the IBP, respondent denied that his agreement with
complainant was a pacto de retrosale. He claimed that it was an
equitable mortgage and that, if only complainant rendered an
accounting of his benefits from the produce of the land, the
total amount would have exceeded ₱15,000.00.
Report and Recommendation of the Investigating
Commissioner and Resolution of the IBP Board of Governors
In a Report and Recommendation16 dated April 29, 2005, the
Investigating Commissioner of the IBP’s Commission on Bar
Discipline found that respondent was in bad faith when he dealt
with complainant and executed the "Deed of Sale with Right to
Repurchase" but later on claimed that the agreement was one
of equitable mortgage. Respondent was also guilty of deceit or
fraud when he represented in the "Deed of Sale with Right to
Repurchase" dated December 2, 1981 that the property was
covered by TCT No. T-662, even giving complainant the
owner’s copy of the said certificate of title, when the said TCT
had already been cancelled on November 17, 1972 by TCT No.
T-3211 in the name of Philippine National Bank (PNB).
Respondent made matters even worse, when he had TCT No.
T-3211 cancelled with the issuance of TCT No. T-7235 under his
and his wife’s name on January 4,1982 without informing
complainant. This was compounded by respondent’s
subsequent mortgage of the property to RBAI, which led to the
acquisition of the property by RBAI and the dispossession
thereof of complainant. Thus, the Investigating Commissioner
recommended that respondent be (1) suspended from the
practice of law for one year, with warning that a similar
misdeed in the future shall be dealt with more severity, and (2)
ordered to return the sum of ₱15,000.00, the amount he
received as consideration for the pacto de retrosale, with
interest at the legal rate.
Considering respondent’s "commission of unlawful acts,
especially crimes involving moral turpitude, actsof dishonesty,
grossly immoral conduct and deceit," the IBP Board of
Governors adopted and approved the Investigating
Commissioner’s Report and Recommendation with
modification as follows: respondent is(1) suspended from the
practice of law for two years, with warning that a similar
misdeed in the future shall be dealt with more severity, and (2)
ordered to return the sum of ₱15,000.00 received in
consideration of the pacto de retrosale, with legal interest.17
The Court’s Ruling
The Court agrees with the recommendation of the IBP Board of
Governors to suspend respondent from the practice of law for
two years, but it refrains from ordering respondent to return
the ₱15,000.00 consideration, plus interest.
Respondent does not deny executing the "Deed of Sale with
Right to Repurchase" dated December 2, 1981 in favor of
complainant. However, respondent insists that the deed is not
one of sale with pacto de retro, but one of equitable mortgage.
Thus, respondent argues that he still had the legal right to
mortgage the subject property to other persons. Respondent
additionally asserts that complainant should render an
accounting of the produce the latter had collected from the
said property, which would already exceed the ₱15,000.00
consideration stated in the deed.
There is no merit in respondent’s defense.
Regardless of whether the written contract between
respondent and complainant is actually one of sale with pacto
de retroor of equitable mortgage, respondent’s actuations in
his transaction with complainant, as well as in the present
administrative cases, clearly show a disregard for the highest
standards of legal proficiency, morality, honesty, integrity, and
fair dealing required from lawyers, for which respondent should
be held administratively liable.
When respondent was admitted to the legal profession, he
took an oath where he undertook to "obey the laws," "do no
falsehood," and "conduct [him]self as a lawyer according to the
best of [his] knowledge and discretion."18 He gravely violated
his oath.
The Investigating Commissioner correctly found, and the IBP
Board of Governors rightly agreed, that respondent caused the
ambiguity or vagueness in the "Deed of Sale with Right to
Repurchase" as he was the one who prepared or drafted the
said instrument. Respondent could have simply denominated
the instrument as a deed of mortgage and referred to himself
and complainant as "mortgagor" and "mortgagee,"
respectively, rather than as "vendor a retro" and "vendee a
retro." If only respondent had been more circumspect and
careful in the drafting and preparation of the deed, then the
controversy between him and complainant could havebeen
avoided or, at the very least, easily resolved. His imprecise and
misleading wording of the said deed on its face betrayed lack
oflegal competence on his part. He thereby fell short of his oath
to "conduct [him]self as a lawyer according to the best of [his]
knowledge and discretion."
More significantly, respondent transgressed the laws and the
fundamental tenet of human relations asembodied in Article 19
of the Civil Code:
Art. 19. Every person must, in the exercise of his rights and in
the performance of his duties, act with justice, give everyone
his due, and observe honesty and good faith.
Respondent, as owner of the property, had the right to
mortgage it to complainant but, as a lawyer, he should have
seen to it that his agreement with complainant is embodied in
an instrument that clearly expresses the intent of the
contracting parties. A lawyer who drafts a contract must see to
it that the agreement faithfully and clearly reflects the obedience thereto. On the other hand, Rule 1.01 states the
intention of the contracting parties. Otherwise, the respective norm of conduct that is expected of all lawyers.22
rights and obligations of the contracting parties will be
uncertain, which opens the door to legal disputes between the Any act or omission that is contrary to, prohibited or
said parties. Indeed, the uncertainty caused by respondent’s unauthorized by, in defiance of, disobedient to, or disregards
poor formulation of the "Deed of Sale with Right to the law is "unlawful." "Unlawful" conduct does not necessarily
imply the element of criminality although the concept is broad
Repurchase" was a significant factor in the legal controversy
enough to include such element.23
between respondent and complainant. Such poor formulation
reflects at the very least negatively on the legal competence of
To be "dishonest" means the disposition to lie, cheat, deceive,
respondent.
defraud or betray; be untrustworthy; lacking inintegrity,
Under Section 63 of the Land Registration Act,19 the law in honesty, probity, integrity in principle, fairness and
effect at the time the PNB acquired the subject property and straightforwardness. On the other hand, conduct that is
obtained TCT No. T-3211 in its name in 1972, where a decree in "deceitful" means as follows:
favor of a purchaser who acquires mortgaged property in
[Having] the proclivity for fraudulent and deceptive
foreclosure proceedings becomes final, such purchaser
misrepresentation, artifice or device that is used upon another
becomes entitled to the issuance of a new certificate of title in
who is ignorant of the true facts, to the prejudice and damage
his name and a memorandum thereof shall be "indorsed upon
of the party imposed upon. In order to be deceitful, the person
the mortgagor’s original certificate."20 TCT No. T-662, which
must either have knowledge of the falsity or acted in reckless
respondent gave complainant when they entered into the
and conscious ignorance thereof, especially if the parties are
"Deed of Sale with Right to Repurchase" dated December 2,
not on equal terms, and was done with the intent that the
1981, does not bearsuch memorandum but only a
aggrieved party act thereon, and the latter indeed acted in
memorandum on the mortgage of the property to PNB in 1963
reliance of the false statement or deed in the manner
and the subsequent amendment of the mortgage.
contemplated to his injury.24 The actions of respondent in
connection with the execution of the "Deed of Sale with Right
Respondent dealt with complainant with bad faith, falsehood,
to Repurchase" clearly fall within the concept of unlawful,
and deceit when he entered into the "Deed of Sale with Right
dishonest, and deceitful conduct. They violate Article 19 of the
to Repurchase" dated December 2, 1981 with the latter. He
Civil Code. They show a disregard for Section 63 of the Land
made it appear that the property was covered by TCT No. T-
Registration Act. They also reflect bad faith, dishonesty, and
662 under his name, even giving complainant the owner’s copy
deceit on respondent’s part. Thus, respondent deserves to be
of the said certificate oftitle, when the truth is that the said TCT
sanctioned.
had already been cancelled some nine years earlier by TCT No.
T-3211 in the name of PNB. He did not evencare to correct the
Respondent’s breach of his oath, violation of the laws, lack of
wrong statement in the deed when he was subsequently issued
good faith, and dishonesty are compounded by his gross
a new copy of TCT No. T-7235 on January 4, 1982,21 or barely a
disregard of this Court’s directives, as well as the orders of the
month after the execution of the said deed. All told,
IBP’s Investigating Commissioner (who was acting as an agent
respondent clearly committed an act of gross dishonesty and
of this Court pursuant to the Court’s referral of these cases to
deceit against complainant.
the IBP for investigation, report and recommendation), which
caused delay in the resolution of these administrative cases.
Canon 1 and Rule 1.01 of the Codeof Professional Responsibility
provide:
In particular, the Court required respondent to comment on
complainant’s Affidavit-Complaint in A.C. No. 4697 and
CANON 1 – A lawyer shall uphold the constitution, obey the
Supplemental Complaint in A.C. No. 4728 on March 12, 1997
laws of the land and promote respect for law and legal
and June 25, 1997, respectively.25 While he requested for
processes.
several extensions of time within which to submit his comment,
Rule 1.01 – A lawyer shall not engage in unlawful, dishonest, no such comment was submitted prompting the Court to
immoral or deceitful conduct. Under Canon 1, a lawyer is not require him in a Resolution dated February 4,1998 to (1) show
only mandated to personally obey the laws and the legal cause why he should not be disciplinarily dealt with or held in
processes, he is moreover expected to inspire respect and contempt for such failure, and (2) submit the consolidated
comment.26 Respondent neither showed cause why he should
not be disciplinarily dealt with or held in contempt for such
failure, nor submitted the consolidated comment.
When these cases were referred to the IBP and during the
proceedings before the IBP’s Investigating Commissioner,
respondent was again required several times to submit his
consolidated answer. He only complied on August 28, 2003, or
more than six years after this Court originally required him to
do so. The Investigating Commissioner also directed the parties
to submit their respective position papers. Despite having been
given several opportunities to submit the same, respondent did
not file any position paper.27
Respondent’s disregard of the directives of this Court and of
the Investigating Commissioner, which caused undue delay in
these administrative cases, contravenes the following
provisions of the Code of Professional Responsibility:
CANON 11 – A lawyer shall observe and maintain the respect
due to the courts and to judicial officers and should insist on
similar conduct by others.
CANON 12 – A lawyer shall exert every effort and consider it his
duty to assist in the speedy and efficient administration of
justice.
Rule 12.03 – A lawyer shall not, after obtaining extensions of
time to file pleadings, memoranda or briefs, let the period lapse
without submitting the same or offering an explanation for his
failure to do so.
Rule 12.04 – A lawyer shall not unduly delay a case, impede the
execution of a judgment or misuse court processes.
Respondent’s infractions are aggravated by the fact that he has
already been imposed a disciplinary sanction before.1âwphi1 In
Nuñez v. Atty. Astorga,28 respondent was held liable for
conduct unbecoming an attorney for which he was fined
₱2,000.00.
Given the foregoing, the suspension of respondent from the
practice of law for two years, as recommended by the IBP
Board of Governors, is proper.
The Court, however, will not adopt the recommendation of the
IBP to order respondent to return the sum of ₱15,000.00 he
received from complainant under the "Deed of Sale with Right
to Repurchase." This is a civil liability best determined and
awarded in a civil case rather than the present administrative
cases.
In Roa v. Moreno,29 the Court pronounced that "[i]n information and guidance. The Court Administrator is directed
disciplinary proceedings against lawyers, the only issue is to circulate this Decision to all courts in the country.
whether the officer of the court is still fit to be allowed to
continue as a member of the Bar. Our only concern is the SO ORDERED.
determination of respondent’s administrative liability. Our
findings have no material bearing on other judicial action which
the parties may choose to file against each other."While the
respondent lawyer’s wrongful actuations may give rise at the
same time to criminal, civil, and administrative liabilities, each
must be determined in the appropriate case; and every case
must be resolved in accordance with the facts and the law
applicable and the quantum of proof required in each. Section
5,30 in relation to Sections 131 and 2,32 Rule 133 of the Rules of
Court states that in administrative cases, such as the ones
atbar, only substantial evidence is required, not proof beyond
reasonable doubt as in criminal cases, or preponderance of
evidence asin civil cases. Substantial evidence is that amount of
relevant evidence which a reasonable mind might accept as
adequate to justify a conclusion.33
The Court notes that based on the same factual antecedents as
the present administrative cases, complainant instituted a
criminal case for estafa against respondent, docketed as
Criminal Case No. 3112-A, before the MTC. When a criminal
action is instituted, the civil action for the recovery of civil
liability arising from the offense charged shall be deemed
instituted with the criminal action unless the offended party
waives the civil action, reserves the right to institute it
separately or institutes the civil action prior to the criminal
action.34 Unless the complainant waived the civil action,
reserved the right to institute it separately, or instituted the
civil action prior to the criminal action, then his civil action for
the recovery of civil liability arising from the estafa committed
by respondent is deemed instituted with Criminal Case No.
3112-A. The civil liability that complainant may recover in
Criminal Case No. 3112-A includes restitution; reparation of the
damage caused him; and/or indemnification for consequential COCA COLA BOTTLERS VS BERNARDO
damages,35 which may already cover the ₱15,000.00
consideration complainant had paid for the subject property. SERENO, C.J.:
This is a Petition for Review1 filed by Coca-Cola Bottlers
WHEREFORE, respondent is hereby found GUILTY of the
Philippines, Inc. (petitioner), from the Court of Appeals (CA)
following: breach of the Lawyer’s Oath; unlawful, dishonest,
and deceitful conduct; and disrespect for the Court and causing Decision2 and Resolution3 in CA-GR. CV No. 91096. The CA
undue delay of these cases, for which he is SUSPENDED from affirmed in toto the Decision4 of Regional Trial Court (RTC)
the practice of law for a period of two (2) years, reckoned from Branch 88 in Quezon City in Civil Case No. Q-00-42320.
receipt of this Decision, with WARNING that a similar
This case originated from the claim for damages filed by
misconduct in the future shall be dealt with more severely.
respondent spouses Jose and Lilibeth Bernardo (respondents)
against petitioner for violation of Articles 19, 20, 21, and 28 of
Let a copy of this Decision be furnished the Office of the Bar
Confidant and the Integrated Bar of the Philippines for their the Civil Code. The RTC found petitioner liable to pay
respondents temperate damages in the amount of P500,000
for loss of goodwill, to be offset against the latter's outstanding
balance for deliveries in the amount of P449,154. The trial court
ordered petitioner to pay P50,000 as moral damages, P20,000
as exemplary damages, and P100,000 as attorney's fees.
Petitioner asserts that the Complaint had no basis, and that the
trial court had no jurisdiction to award temperate damages in
an amount equivalent to the outstanding obligation of
respondents. It prays not only for the reversal of the assailed
judgments, but also for an award of moral and exemplary
damages, as well as attorney's fees and litigation expenses. It
also asks that respondents be ordered to pay P449,154 plus
legal interest from the date of demand until full payment.5
We deny the Petition.
FACTS
Petitioner is a domestic corporation engaged in the large-scale
manufacture, sale, and distribution of beverages around the
country.6 On the other hand, respondents, doing business
under the name "Jolly Beverage Enterprises," are wholesalers
of softdrinks in Quezon City, particularly in the vicinities of
Bulacan Street, V. Luna Road, Katipunan Avenue, and Timog
Avenue.7
The business relationship between the parties commenced in
1987 when petitioner designated respondents as its
distributor.8 On 22 March 1994, the parties formally entered
into an exclusive dealership contract for three years.9 Under
the Agreement,10 petitioner would extend developmental
assistance to respondents in the form of cash assistance and
trade discount incentives. For their part, respondents
undertook to sell petitioner's products exclusively, meet the
sales quota of 7,000 cases per month, and assist petitioner in its
marketing efforts.11
On 1 March 1997, the parties executed a similar agreement for
another two years, or until 28 February 1999.12 This time,
petitioner gave respondents complimentary cases of its
products instead of cash assistance, and increased the latter's
sales quota to 8,000 cases per month.
For 13 years, the parties enjoyed a good and harmonious
business partnership.13 While the contracts contained a clause
for breach, it was never enforced.14
Sometime in late 1998 or early 1999, before the contract
expired, petitioner required respondents to submit a list of their
customers on the pretext that it would formulate a policy
defining its territorial dealership in Quezon City.15 It assured
respondents that their contract would be renewed for a longer
period, provided that they would submit the list.16 However,
despite their compliance, the promise did not materialize.17
Respondents discovered that in February 1999, petitioner
started to reach out to the persons whose names were on the
list.18 Respondents also received reports that their delivery
trucks were being trailed by petitioner's agents; and that as
soon as the trucks left, the latter would approach the former's
customers.19 Further, respondents found out that petitioner
had employed a different pricing scheme, such that the price
given to distributors was significantly higher than that given to
supermarkets.20 It also enticed direct buyers and sari-sari store
owners in the area with its "Coke Alok" promo, in which it gave
away one free bottle for every case purchased.21 It further
engaged a store adjacent to respondents' warehouse to sell the
former's products at a substantially lower price.22
Respondents claimed that because of these schemes, they lost
not only their major customers - such as Peach Blossoms, May
Flower Restaurant, Saisaki Restaurant, and Kim Hong
Restaurant but also small stores, such as the canteen in the
hospital where respondent Jose Bernardo worked.23 They
admitted that they were unable to pay deliveries worth
P449,154.2
Respondents filed a Complaint25 for damages, alleging that
the acts of petitioner constituted dishonesty, bad faith, gross
negligence, fraud, and unfair competition in commercial
enterprise.26 The Complaint was later amended27 to implead
petitioner's officers and personnel, include additional factual
allegations, and increase the amount of damages prayed for.
Petitioner denied the allegations.28 It maintained that it had
obtained a list of clients through surveys, and that promotional
activities or developmental strategies were implemented only
after the expiration of the Agreements.29 It opined that the
filing of the complaint was a mere ploy resorted to by
respondents to evade the payment of the deliveries.3
The RTC held petitioner liable for damages for abuse of rights
in violation of Articles 19, 20, and 21 of the Civil Code and for
unfair competition under Article 28. It found that petitioner's
agents solicited the list of clients in order to penetrate the
market and directly supply customers with its products.31
Moreover, the trial court found that petitioner had recklessly
ignored the rights of respondents to have a fair chance to
engage in business or earn a living when it deliberately used
oppressive methods to deprive them of their business.32 Its
officers were, however, absolved of liability, as there was no
showing that they had acted in their individual and personal
capacities.33
In the body of its Decision, the RTC stated that petitioner
should pay respondents P500,000 as temperate damages, and
that it was only just and fair that the latter offset this amount
against their outstanding obligation to petitioner in the amount
of P449,154.34 In the fallo, the trial court awarded P50,000 as
moral damages, P20,000 as exemplary damages, and P100,000
as attorney's fees.35 It denied petitioner's counterclaim for
damages for lack of factual and legal basis.36 Petitioner moved
for reconsideration, but the motion was denied.37
Petitioner then elevated the case to the CA, which affirmed the
RTC Decision in toto. According to the appellate court's ruling,
petitioner had used its sizable resources to railroad the
business of respondents:38chanroblesvirtuallawlibrary
[Petitioner] infiltrated certain areas in Quezon City at the
expense of and later, in derogation of its wholesalers,
particularly [respondents]. As admitted by Allan Mercado, the
Integrated Selling and Marketing Manager of appellant, it was
previously dependent on wholesalers to circulate its products
around the country. x x x.
[T]owards the end of the partnership, appellant employed a
different marketing scheme purportedly to obviate the poor
dealership management from wholesalers in major areas. But
as may be shown by the incidents leading to the filing of this
case, this method was designed strategically to overrun
[respondents'] business and take over the customers of its
wholesalers.
One such method was "different pricing schemes" wherein the
prices given to supermarkets and grocery stores were
considerably lower than those imposed on wholesalers. No
prior advice thereof was given to [respondents] or any of the
wholesalers. In fact, they only knew of it when their customers
began complaining about the variation in prices of softdrinks
sold in supermarkets and those that were sold by them. When
in fact [respondent] Bernardo personally inspected the
products in grocery stores, he discovered that a box of Coke-in-
can is sold at P40.00, lower than those offered by them as
wholesalers.
About the same time, [petitioner] also implemented the "Area
Market Cooperatives" (AMC) and the "Coke-Alok" promo.
Under the AMC, customers of wholesalers can purchase
[petitioner's] products from prominent stores in heavily
crowded areas for P76.00 per case, as opposed to
[respondent's] offering of P112.00. In "Coke-Alok," [petitioner]
directly sold Coke products to wholesale customers with
incentives as free bottle of Coke for every case of softdrinks
purchased. Being of limited resources, [respondents had no]
means to equal the lucrative incentives given by [petitioner] to
their customers.
Apart from direct selling and other promotions, [petitioner]
also employed high-handed means that further shrunk
[respondents'] market coverage. In one instance, [petitioner's
sales representative] advised [respondents] and other
wholesalers to keep away from major thoroughfares.
Apparently, [petitioner] was going to supply their products to
these stores themselves. x x x.
x x x Furthermore, one of [petitioner's] representatives, Nelson
Pabulayan, admitted that he sold products at the canteen in V.
Luna Hospital [which was then being serviced by respondents].
As if that was not enough, petitioner engaged other stores,
such as Freezel's Bakeshop that was located adjacent to
[respondent's] warehouse, to sell Coke products at a price
substantially lower than [that offered by respondents].
ISSUES
Petitioner argues that the trial court had no jurisdiction to
award temperate damages that were not prayed for in the
Complaint. It further asserts that it did not violate Articles 19,
20, 21 or 28; hence, the award of damages and attorney's fees
was improper.
OUR RULING
The CA did not err in affirming the finding that petitioner was
liable for temperate, moral and exemplary damages, as well as
attorney's fees, tor abuse of rights and unfair competition.
The Petition raises questions of fact.
Petitioner ignores the nature of a petition for review as a
remedy against errors of law. Instead, it raises factual matters
that have already been passed upon by the RTC and the CA.
It insists on the following facts: 1) the "promotional activities"
were implemented after the dealership agreements expired;39
2) the "developmental strategies" were implemented
nationwide and were not meant to destroy the business of
respondents;40 3) its agents did not follow the trucks of Jolly
Beverages;41 4) the price difference resulted because
respondents could no longer avail of trade discounts and
incentives under the expired Agreement;42 and 5) there is no
causal connection between the promotional activities and the
claimed losses of respondents.43
Petitioner contends that since it did not assign any exclusive
territory to respondents, the latter had no exclusive right to any
customer.44 It supposedly decided to rely on its own sales
personnel to push the sale of its products, because the
distributors had violated the terms of their agreements by
selling competing products, failing to meet the required sales
volume, or failing to pay on time.45 Petitioner, however, did
not allege that respondents committed any of these actions
during the existence of the agreement.
We have repeatedly held that factual findings of the trial court,
especially when affirmed by the appellate court, are given great
weight, even finality, by this Court.46 Petitioner fails to make a
convincing argument that this case falls under any of the
exceptions to the rule. On the contrary, the Decisions of the
RTC and the CA appear to be supported by the records.
Petitioner bewails the fact that the RTC and the CA, in
establishing the facts, relied heavily on the testimony of
respondent Jose Bernardo.47
Petitioner, however, forgets that trial courts are in an ideal
position to observe the demeanor of the witnesses and can
therefore discern if the latter are telling the truth or not.48 In
this case, both the trial and the appellate courts found the
testimonies of respondent Jose Bernardo and his witnesses
more credible than those of the witnesses presented by
petitioners. We shall not substitute our judgment for that of the
trial court, absent any compelling reason.
Petitioner is liable for damages for abuse of rights and unfair
competition under the Civil Code.
Both the RTC and the CA found that petitioner had employed
oppressive and high-handed schemes to unjustly limit the
market coverage and diminish the investment returns of
respondents.49 The CA summarized its findings as
follows:50chanroblesvirtuallawlibrary
This [cut-throat competition] is precisely what appellant did in
order to take over the market: directly sell its products to or
deal them off to competing stores at a price substantially lower
than those imposed on its wholesalers. As a result, the
wholesalers suffered losses, and in [respondents'] case, laid of a
number of employees and alienated the patronage of its major
customers including small-scale stores.
It must be emphasized that petitioner is not only a beverage
giant, but also the manufacturer of the products; hence, it sets
the price. In addition, it took advantage of the information
provided by respondents to facilitate its takeover of the latter's
usual business area. Distributors like respondents, who had
assisted petitioner in its marketing efforts, suddenly found
themselves with fewer customers. Other distributors were left
with no choice but to fold.51
Articles 19, 20, and 21 of the Civil Code provide the legal
bedrock for the award of damages to a party who suffers
damage whenever another person commits an act in violation
of some legal provision; or an act which, though not
constituting a transgression of positive law, nevertheless
violates certain rudimentary rights of the party aggrieved.52
The provisions read:
Art. 19. Every person must, in the exercise of his rights and in
the performance of his duties, act with justice, give everyone
his due, and observe honesty and good faith.
Art. 20. Every person who, contrary to law, willfully or
negligently causes damage to another, shall indemnify the
latter for the same.
Art. 21. Any person who willfully causes loss or injury to another
in a manner that is contrary to morals, good customs or public
policy shall compensate the latter for the damage.
In Albenson Enterprises Corp. v. CA,53 this Court held that
under any of the above provisions of law, an act that causes
injury to another may be made the basis for an award of
damages. As explained by this Court in GF Equity, Inc. v.
Valenzona:54chanroblesvirtuallawlibrary
The exercise of a right ends when the right disappears; and it
disappears when it is abused, especially to the prejudice of
others. The mask of a right without the spirit of justice which
gives it life is repugnant to the modern concept of social law. It
cannot be said that a person exercises a right when he
unnecessarily prejudices another or offends morals or good
customs. Over and above the specific precepts of positive law
are the supreme norms of justice which the law develops and
which are expressed in three principles: honeste vivere, alterum
non laedere and jus suum quique tribuere; and he who violates
them violates the law. For this reason, it is not permissible to
abuse our rights to prejudice others.
Meanwhile, the use of unjust, oppressive, or high-handed
business methods resulting in unfair competition also gives a
right of action to the injured party. Article 28 of the Civil Code
provides:
Art. 28. Unfair competition in agricultural, commercial or
industrial enterprises or in labor through the use of force,
intimidation, deceit, machination or any other unjust,
oppressive or highhanded method shall give rise to a right of
action by the person who thereby suffers damage.
Petitioner cites Tolentino, who in turn cited Colin and Capitant.
According to the latter, the act of "a merchant [who] puts up a
store near the store of another and in this way attracts some of
the latter's patrons" is not an abuse of a right.55 The scenario in
the present case is vastly different: the merchant was also the
producer who, with the use of a list provided by its distributor,
knocked on the doors of the latter's customers and offered the
products at a substantially lower price. Unsatisfied, the
merchant even sold its products at a preferential rate to
another store within the vicinity. Jurisprudence holds that when
a person starts an opposing place of business, not for the sake
of profit, but regardless of Joss and for the sole purpose of
driving a competitor out of business, in order to take advantage
of the effects of a malevolent purpose, that person is guilty of a
wanton wrong.56
Temperate, moral, and exemplary damages, as well as
attorney's fees, were properly awarded.
Petitioner argues that the trial court did not have jurisdiction to
grant an award of temperate damages, because respondents
did not specifically pray for it in their Amended Complaint:
WHEREFORE, premises considered, it is most respectfully
prayed that the Honorable Court render a judgment directing
defendants to:
Pay plaintiffs the amount of P1,000,000.00 representing loss of
goodwill nurtured over the past 13 years as actual damages.
Pay plaintiffs the amount of P200,000 representing moral
damages.
Pay plaintiffs the amount of P100,000 representing exemplary
damages.
Pay plaintiffs the amount of P100,000 representing attorney's
fees.
Other reliefs which are just and equitable under the premises
are also prayed for.
Petitioner's argument is flimsy and unsupported even by the
cases it has cited.57 The CA correctly ruled that the award of
temperate damages was justified, even if it was not specifically
prayed for, because 1) respondents did pray for the grant of
"other reliefs," and 2) the award was clearly warranted under
the circumstances. Indeed, the law permits judges to award a
different kind of damages as an alternative to actual damages:
Civil Code, Art. 2224. Temperate or moderate damages, which
are more than nominal but less than compensatory damages,
may be recovered when the court finds that some pecuniary
loss has been suffered but its amount can not, from the nature
of the case, be provided with certainty. (Emphasis supplied)
Compensatory damages may be awarded in the concept of
temperate damages for injury to business reputation or
business standing, loss of goodwill, and loss of customers who
shifted their patronage to competitors.58
It is not extraordinary for courts to award temperate damages
in lieu of actual damages. In Canada v. All Commodities
Marketing Corporation,59 this Court awarded temperate
damages in recognition of the pecuniary loss suffered, after
finding that actual damages could not be awarded for lack of
proof. In Public Estates Authority v. Chu,60 this Court held that
temperate damages should have been awarded by the trial
court considering that the plaintiff therein had suffered some
pecuniary loss.
In this case, both the RTC and the CA found that respondents
had similarly suffered pecuniary loss by reason of petitioner's
high-handed machinations to eliminate competition in the
market.61
We see no grave error on the part of the RTC when it ruled that
the unpaid obligation of respondents shall be offset against the
temperate damages due them from petitioner.62 However, the
trial court was not accurate in considering the P500,000
temperate damages as adequate to completely extinguish the
obligation of respondents to petitioner.63 We note that while
the principal was P449,154, this amount earned legal interest
from the time of demand. Nonetheless, in view of the
established fact that respondents incurred the losses after their
business was systematically crippled by petitioner, it is only
proper and just that the obligation, as well as the legal interest
that has accrued, be deemed totally compensated by the
temperate damages. Therefore, respondents do not need to
tender the amount of P449,154 plus legal interest to petitioner,
while the latter does not have to tender any amount as
temperate damages to the former.
With regard to moral damages, petitioner argues that
respondents failed to provide satisfactory proof that the latter
had undergone any suffering or injury.64 This is a factual
question that has been resolved by the trial court in a Decision
affirmed by the CA. The award finds legal basis under Article
2219(10) of the Civil Code, which states that moral damages
may be recovered in acts and actions referred to in Articles 21
and 28.65
Petitioner likewise questions the award of exemplary damages
without "competent proof."66 It cites Spouses Villafuerte v.
CA67 as basis for arguing that the CA should have based its
Decision regarding the fact and the amount of exemplary
damages upon competent proof that respondents have
suffered injury and upon evidence of the actual amount
thereof. We enjoin petitioner's counsel to fully and carefully
read the text of our decisions before citing them as
authority.68 The excerpt lifted pertains to compensatory
damages, not exemplary damages. We remind counsel that
exemplary damages are awarded under Article 2229 of the Civil
Code by way of example or correction for the public good. The
determination of the amount is left to the discretion of the
judge; its proof is not incumbent upon the claimant.
There being no meritorious argument raised by petitioner, the
award of exemplary damages must be sustained to caution
powerful business owners against the use of oppressive and
high-handed commercial strategies to target and trample on
the rights of small business owners, who are striving to make a
decent living.
Exemplary damages having been awarded, the grant of
attorney's fees was therefore warranted.69
Petitioner's counterclaims for moral and exemplary damages,
as well as attorney's fees and litigation expenses, were properly
denied.
The counterclaim for the payment of P449,154 plus legal
interest was effectively granted when the trial court offset the
temperate damages awarded to respondents against the
outstanding obligation of the latter to petitioner.
The counterclaims for moral and exemplary damages, as well
as attorney's fees and litigation expenses, had no basis and
were properly denied. The fact that petitioner was compelled
to engage the services of counsel in order to defend itself
against the suit of respondents did not entitle it to attorney's
fees.

According to petitioner, it is entitled to moral damages,

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

With respect to the prayer for exemplary damages, neither do

we find any act of respondents that has to be deterred.

WHEREFORE, the Petition is DENIED. The Decision dated 23

July 2009 and Resolution dated 19 November 2009 rendered by
the Court of Appeals in CA-G.R. CV No. 91096, which affirmed
in toto the Decision dated 28 September 2007 issued by
Regional Trial Court Branch 88 Quezon City in Civil Case No. Q-
00-42320, are hereby AFFIRMED with MODIFICATION in that
the damages awarded shall earn legal interest of 6% per annum
from the date of finality of this Decision until its full
satisfaction. The total compensation of respondents' unpaid
obligation, including legal interest that has accrued, and the
temperate damages awarded to them, is hereby upheld.

SO ORDERED.

ST. MARTIN POLYCLINIC VS LWV CONSTRUCTION

PERLAS-BERNABE, J.:

Assailed in this petition for review on certiorari1 are the

Decision2 dated July 11, 2014 and the Resolution3 dated
February 27, 2015 of the Court of Appeals (CA) in CA-G.R. SP
No. 125451, which affirmed with modification the Decision4
dated December 15, 2011 and the Order dated May 25, 2012 of
the Regional Trial Court of Mandaluyong City, Branch 211 (RTC)
in SCA Case No. MC11-879 (Civil Case No. 21881), and thereby
ordered herein petitioner St. Martin Polyclinic, Inc. (petitioner)
to pay respondent LWV Construction Corporation (respondent)
temperate damages in the amount of P50,000.00.
The Facts
Respondent is engaged in the business of recruiting Filipino
workers for deployment to Saudi Arabia.5 On the other hand,
petitioner is an accredited member of the Gulf Cooperative
Council Approved Medical Centers Association (GAMCA) and
as such, authorized to conduct medical examinations of
prospective applicants for overseas employment.6
On January 10, 2008, respondent referred prospective applicant
Jonathan V. Raguindin (Raguindin) to petitioner for a pre-
deployment medical examination in accordance with the
instructions from GAMCA.7 After undergoing the required
examinations, petitioner cleared Raguindin and found him "fit
for employment," as evidenced by a Medical Report8 dated
January 11, 2008 (Medical Report).9
Based on the foregoing, respondent deployed Raguindin to
Saudi Arabia, allegedly incurring expenses in the amount of
P84,373.41.10 Unfortunately, when Raguindin underwent
another medical examination with the General Care Dispensary
of Saudi Arabia (General Care Dispensary) on March 24, 2008,
he purportedly tested positive for HCV or the hepatitis C virus.
The Ministry of Health of the Kingdom of Saudi Arabia
(Ministry of Health) required a re-examination of Raguindin,
which the General Care Dispensary conducted on April 28,
2008.11 However, the results of the re-examination remained
the same, i.e., Raguindin was positive for HCV, which results
were reflected in a Certification12 dated April 28, 2008
(Certification). An undated HCV Confirmatory Test Report13
likewise conducted by the Ministry of Health affirmed such
finding, thereby leading to Raguindin's repatriation to the
Philippines.14
Claiming that petitioner was reckless in issuing its Medical
Report stating that Raguindin is "fit for employment" when a
subsequent finding in Saudi Arabia revealed that he was
positive for HCV, respondent filed a Complaint15 for sum of
money and damages against petitioner before the
Metropolitan Trial Court of Mandaluyong City, Branch 60
(MeTC). Respondent essentially averred that it relied on
petitioner's declaration and incurred expenses as a
consequence. Thus, respondent prayed for the award of
damages in the amount of P84,373.41 representing the
expenses it incurred in deploying Raguindin abroad.16
In its Answer with compulsory counterclaim,17 petitioner
denied liability and claimed that: first, respondent was not a
proper party in interest for lack of privity of contract between
them; second, the MeTC had no jurisdiction over the case as it
involves the interpretation and implementation of a contract of
employment; third, the action is premature as Raguindin has
yet to undergo a post-employment medical examination
following his repatriation; and fourth, the complaint failed to
state a cause of action as the Medical Report issued by
petitioner had already expired on April 11, 2008, or three (3)
months after its issuance on January 11, 2008.18
The MeTC Ruling
In a Decision19 dated December 17, 2010, the MeTC rendered
judgment in favor of respondent and ordered petitioner to pay
the amount of P84,373.41 as actual damages, P20,000.00 as
attorney's fees, and the costs of suit.20
At the onset, the MeTC held that it had jurisdiction over the
case, since respondent was claiming actual damages incurred in
the deployment of Raguindin in the amount of P84,373.41.21 It
further ruled that respondent was a real party in interest, as it
would not have incurred expenses had petitioner not issued the
Medical Report certifying that Raguindin was fit to work.
On the merits, the MeTC found that respondent was entitled to
be informed accurately of the precise condition of Raguindin
before deploying the latter abroad and consequently, had
sustained damage as a result of the erroneous certification.22
In this relation, it rejected petitioner's contention that
Raguindin may have contracted the disease after his medical
examination in the Philippines up to the time of his
deployment, there being no evidence offered to corroborate
the same.23
Aggrieved, petitioner appealed to the RTC, contending,24
among others, that respondent failed to comply with the
requirements on the authentication and proof of documents
under Section 24,25 Rule 132 of the Rules of Court, considering
that respondent's evidence, particularly the April 28, 2008
Certification issued by the General Care Dispensary and the
HCV Confirmatory Test Report issued by the Ministry of Health,
are foreign documents issued in Saudi Arabia.
The RTC Ruling
In a Decision26 dated December 15, 2011, the RTC dismissed
petitioner's appeal and affirmed the MeTC Decision in its
entirety.27 Additionally, the RTC pointed out that petitioner
can no longer change the theory of the case or raise new issues
on appeal, referring to the latter's argument on the
authentication of repondent's documentary evidence.28
Petitioner's motion for reconsideration29 was denied in an
Order30 dated May 25, 2012. Dissatisfied, petitioner elevated
the case to the CA.31
The CA Ruling
In a Decision32 dated July 11, 2014, the CA affirmed the RTC
Decision, with the modification deleting the award of actual
damages and instead, awarding temperate damages in the
amount of P50,000.00.33
The CA held that petitioner failed to perform its duty to
accurately diagnose Raguindin when it issued its Medical
Report declaring the latter "fit for employment", considering
that he was subsequently found positive for HCV in Saudi
Arabia.34 Further, the CA opined that the Certification issued
by the General Care Dispensary is not a public document and in
such regard, rejected petitioner's argument that the same is
inadmissible in evidence for not having been authenticated.
Moreover, it remarked that petitioner's own Medical Report
does not enjoy the presumption of regularity as petitioner is
merely an accredited clinic.35 Finally, the CA ruled that
petitioner could not disclaim liability on the ground that
Raguindin tested positive for HCV in Saudi Arabia after the
expiration of the Medical Report on April 11, 2008, noting that
the General Care Dispensary issued its Certification on April 28,
2008, or a mere seventeen (17) days from the expiration of
petitioner's Medical Report.36 Hence, the CA concluded that "it
is contrary to human experience that a newly-deployed
overseas worker, such as Raguindin, would immediately
contract a serious virus at the very beginning of a
deployment."37
However, as the records are bereft of evidence to show that
respondent actually incurred the amount of P84,373.41 as
expenses for Raguindin's deployment, the CA deleted the
award of actual damages and instead, awarded temperate
damages in the amount of P50,000.00.38
Aggrieved, petitioner filed a motion for partial
reconsideration,39 which the CA denied in a Resolution40
dated February 27, 2015; hence, this petition.
The Issue Before the Court
The essential issue advanced for the Court's resolution is
whether or not petitioner was negligent in issuing the Medical
Report declaring Raguindin "fit for employment" and hence,
should be held liable for damages.
The Court's Ruling
The petition is granted.
I.
At the outset, it should be pointed out that a re-examination of
factual findings cannot be done acting on a petition for review
on certiorari because the Court is not a trier of facts but reviews
only questions of law.41 Thus, in petitions for review on
certiorari, only questions of law may generally be put into issue.
This rule, however, admits of certain exceptions, such as "when
the inference made is manifestly mistaken, absurd or
impossible"; or "when the findings are conclusions without
citation of specific evidence on which they are based."42
Finding a confluence of certain exceptions in this case, the
general rule that only legal issues may be raised in a petition for
review on certiorari under Rule 45 of the Rules of Court would
not apply, and the Court retains the authority to pass upon the
evidence presented and draw conclusions therefrom.43
II.
An action for damages due to the negligence of another may
be instituted on the basis of Article 2176 of the Civil Code,
which defines a quasi-delict:
Article 2176. Whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay for
the damage done. Such fault or negligence, if there is no pre-
existing contractual relation between the parties, is called a
quasi-delict and is governed by the provisions of this Chapter.
The elements of a quasi-delict are: (1) an act or omission; (2)
the presence of fault or negligence in the performance or non-
performance of the act; (3) injury; (4) a causal connection
between the negligent act and the injury; and (5) no pre-
existing contractual relation.44
As a general rule, any act or omission coming under the
purview of Article 2176 gives rise to a cause of action under
quasi-delict. This, in turn, gives the basis for a claim of
damages.45 Notably, quasi-delict is one among several sources
of obligation. Article 1157 of the Civil Code states:
Article 1157. Obligations arise from:
(1) Law;
(2) Contracts;
(3) Quasi-contracts;
(4) Acts or omissions punished by law; and
(5) Quasi-delicts.
However, as explained by Associate Justice Marvic M.V.F.
Leonen (Justice Leonen) in his opinion in Alano v. Magud-
Logmao46 (Alano), "Article 2176 is not an all-encompassing
enumeration of all actionable wrongs which can give rise to the
liability for damages. Under the Civil Code, acts done in
violation of Articles 19, 20, and 21 will also give rise to
damages."47 These provisions - which were cited as bases by
the MTC, RTC and CA in their respective rulings in this case -
read as follows:
Article 19. Every person must, in the exercise of his rights and in
the performance of his duties, act with justice, give everyone
his due, and observe honesty and good faith.
Article 20. Every person who, contrary to law, willfully or
negligently causes damage to another, shall indemnify the
latter for the same.
Article 21. Any person who willfully causes loss or injury to
another in a manner that is contrary to morals, good customs,
or public policy shall compensate the latter for the damage.
"[Article 19], known to contain what is commonly referred to as
the principle of abuse of rights, sets certain standards which
must be observed not only in the exercise of one's rights, but
also in the performance of one's duties."48 Case law states that
"[w]hen a right is exercised in a manner which does not
conform with the norms enshrined in Article 19 and results in
damage to another, a legal wrong is thereby committed for
which the wrongdoer must be held responsible. But while
Article 19 lays down a rule of conduct for the government of
human relations and for the maintenance of social order, it
does not provide a remedy for its violation. Generally, an action
for damages under either Article 20 or Article 21 would [then]
be proper."49 Between these two provisions as worded, it is
Article 20 which applies to both willful and negligent acts that
are done contrary to law. On the other hand, Article 21 applies
only to willful acts done contra bonos mores.50
In the Alano case, Justice Leonen aptly elaborated on the
distinctive applications of Articles 19, 20 and 21, which are
general provisions on human relations, vis-a-vis Article 2176,
which particularly governs quasi-delicts:
Article 19 is the general rule which governs the conduct of
human relations. By itself, it is not the basis of an actionable
tort. Article 19 describes the degree of care required so that an
actionable tort may arise when it is alleged together with
Article 20 or Article 21.
Article 20 concerns violations of existing law as basis for an
injury. It allows recovery should the act have been willful or
negligent. Willful may refer to the intention to do the act and
the desire to achieve the outcome which is considered by the
plaintiff in tort action as injurious. Negligence may refer to a
situation where the act was consciously done but without
intending the result which the plaintiff considers as injurious.
Article 21, on the other hand, concerns injuries that may be
caused by acts which are not necessarily proscribed by law. This
article requires that the act be willful, that is, that there was an
intention to do the act and a desire to achieve the outcome. In
cases under Article 21, the legal issues revolve around whether
such outcome should be considered a legal injury on the part of
the plaintiff or whether the commission of the act was done in
violation of the standards of care required in Article 19.
Article 2176 covers situations where an injury happens through
an act or omission of the defendant. When it involves a positive
act, the intention to commit the outcome is irrelevant. The act
itself must not be a breach of an existing law or a pre-existing
contractual obligation. What will be considered is whether
there is "fault or negligence” attending the commission of the
act which necessarily leads to the outcome considered as
injurious by the plaintiff. The required degree of diligence will
then be assessed in relation to the circumstances of each and
every case.51 (Emphases and underscoring supplied)
Thus, with respect to negligent acts or omissions, it should
therefore be discerned that Article 20 of the Civil Code
concerns "violations of existing law as basis for an injury",
whereas Article 2176 applies when the negligent act causing
damage to another does not constitute "a breach of an existing
law or a pre-existing contractual obligation."
In this case, the courts a quo erroneously anchored their
respective rulings on the provisions of Articles 19, 20, and 21 of
the Civil Code. This is because respondent did not proffer (nor
have these courts mentioned) any law as basis for which
damages may be recovered due to petitioner's alleged
negligent act. In its amended complaint, respondent mainly
avers that had petitioner not issue a "fit for employment"
Medical Report to Raguindin, respondent would not have
processed his documents, deployed him to Saudi Arabia, and
later on - in view of the subsequent findings that Raguindin was
positive for HCV and hence, unfit to work - suffered actual
damages in the amount of P84,373.41.52 Thus, as the claimed
negligent act of petitioner was not premised on the breach of
any law, and not to mention the incontestable fact that no pre-
existing contractual relation was averred to exist between the
parties, Article 2176 - instead of Articles 19, 20 and 21 - of the
Civil Code should govern.
III.
Negligence is defined as the failure to observe for the
protection of the interests of another person, that degree of
care, precaution and vigilance which the circumstances justly
demand, whereby such other person suffers injury.53
As early as the case of Picart v. Smith,54 the Court elucidated
that "the test by which to determine the existence of
negligence in a particular case is: Did the defendant in doing
the alleged negligent act use that reasonable care and caution
which an ordinarily prudent person would have used in the
same situation? If not, then he is guilty of negligence."55
Corollary thereto, the Court stated that "[t]he question as to
what would constitute the conduct of a prudent man in a given
situation must of course be always determined in the light of
human experience and in view of the facts involved in the
particular case. Abstract speculation cannot here be of much
value x x x: Reasonable men govern their conduct by the
circumstances which are before them or known to them. They
are not, and are not supposed to be, omniscient of the future.
Hence[,] they can be expected to take care only when there is
something before them to suggest or warn of danger."56
Under our Rules of Evidence, it is disputably presumed that a
person takes ordinary care of his concerns and that private
transactions have been fair and regular.57 In effect, negligence
cannot be presumed, and thus, must be proven by him who
alleges it.58 In Huang v. Philippine Hoteliers, Inc.:59
[T]he negligence or fault should be clearly established as it is
the basis of her action. The burden of proof is upon [the
plaintiff]. Section 1, Rule 131 of the Rules of Court provides that
"burden of proof is the duty of a party to present evidence on
the facts in issue necessary to establish his claim or defense by
the amount of evidence required by law." It is then up for the
plaintiff to establish his cause of action or the defendant to
establish his defense. Therefore, if the plaintiff alleged in his
complaint that he was damaged because of the negligent acts
of the defendant, he has the burden of proving such
negligence. It is even presumed that a person takes ordinary
care of his concerns. The quantum of proof required is
preponderance of evidence.60
The records of this case show that the pieces of evidence
mainly relied upon by respondent to establish petitioner's
negligence are: (a) the Certification61 dated April 28, 2008; and
(b) the HCV Confirmatory Test Report.62 However, these
issuances only indicate the results of the General Care
Dispensary and Ministry of Health's own medical examination
of Raguindin finding him to be positive for HCV. Notably, the
examination conducted by the General Care Dispensary, which
was later affirmed by the Ministry of Health, was conducted
only on March 24, 2008, or at least two (2) months after
petitioner issued its Medical Report on January 11, 2008.
Hence, even assuming that Raguindin's diagnosis for HCV was
correct, the fact that he later tested positive for the same does
not convincingly prove that he was already under the same
medical state at the time petitioner issued the Medical Report
on January 11, 2008. In this regard, it was therefore incumbent
upon respondent to show that there was already negligence at
the time the Medical Report was issued, may it be through
evidence that show that standard medical procedures were not
carefully observed or that there were already palpable signs
that exhibited Raguindin's unfitness for deployment at that
time. This is hardly the case when respondent only proffered
evidence which demonstrate that months after petitioner's
Medical Report was issued, Raguindin, who had already been
deployed to Saudi Arabia, tested positive for HCV and as such,
was no longer "fit for employment".
In fact, there is a reasonable possibility that Raguindin became
exposed to the HCV only after his medical examination with
petitioner on January 11, 2008. Based on published reports
from the World Health Organization, HCV or the hepatitis C
virus causes both acute and chronic infection. Acute HCV
infection is usually asymptomatic,63 and is only very rarely
associated with life-threatening diseases. The incubation
period64 for HCV is two (2) weeks to six (6) months, and
following initial infection, approximately 80% of people do not
exhibit any symptoms.65 Indisputably, Raguindin was not
deployed to Saudi Arabia immediately after petitioner's
medical examination and hence, could have possibly
contracted the same only when he arrived thereat. In light of
the foregoing, the CA therefore erred in holding that "[h]ad
petitioner more thoroughly and diligently examined Raguindin,
it would likely have discovered the existence of the HCV
because it was contrary to human experience that a newly-
deployed overseas worker, such as Raguindin, would
immediately have contracted the disease at the beginning of
his deployment"66
While petitioner's Medical Report indicates an expiration of
April 11, 2008, the Court finds it fitting to clarify that the same
could not be construed as a certified guarantee coming from
petitioner that Raguindin's medical status at the time the
report was issued on January 11, 2008 (i.e., that he was fit for
employment) would remain the same up until that date (i.e.,
April 11, 2008). As earlier intimated, the intervening period
could very well account for a number of variables that could
have led to a change in Raguindin's condition, such as his
deployment to a different environment in Saudi Arabia. If at all,
the expiration date only means that the Medical Report is valid
- and as such, could be submitted - as a formal requirement for
overseas employment up until April 11, 2008; it does not, by
any means, create legal basis to hold the issuer accountable for
any intervening change of condition from the time of issuance
up until expiration. Truly, petitioner could not be reasonably
expected to predict, much less assure, that Raguindin's medical
status of being fit for employment would remain unchanged.
Thus, the fact that the Medical Report's expiration date of April
11, 2008 was only seventeen (17) days away from the issuance
of the General Care Dispensary's April 28, 2008 Certification
finding Raguindin positive for HCV should not - as it does not -
establish petitioner's negligence.
IV.
At any rate, the fact that Raguindin tested positive for HCV
could not have been properly established since the courts a
quo, in the first place, erred in admitting and giving probative
weight to the Certification of the General Care Dispensary,
which was written in an unofficial language. Section 33, Rule
132 ofthe Rules of Court states that:
Section 33. Documentary evidence in an unofficial language. -
Documents written in an unofficial language shall not be
admitted as evidence, unless accompanied with a translation
into English or Filipino. To avoid interruption of proceedings,
parties or their attorneys are directed to have such translation
prepared before trial.67
A cursory examination of the subject document would reveal
that while it contains English words, the majority of it is in an
unofficial language. Sans any translation in English or Filipino
provided by respondent, the same should not have been
admitted in evidence; thus their contents could not be given
probative value, and deemed to constitute proof of the facts
stated therein.
Moreover, the due execution and authenticity of the said
certification were not proven in accordance with Section 20,
Rule 132 of the Rules of Court:
Section 20. Proof of private document. - Before any private
document offered as authentic is received in evidence, its due
execution and authenticity must be proved either:
(a) By anyone who saw the document executed or written; or
(b) By evidence of the genuineness of the signature or
handwriting of the maker.
(c) Any other private document need only be identified as that
which it is claimed to be.
Notably, the foregoing provision applies since the Certification
does not fall within the classes of public documents under
Section 19, Rule 132 of the Rules of Court68 - and hence, must
be considered as private. It has been settled that an unverified
and unidentified private document cannot be accorded
probative value.69 In addition, case law states that "since a
medical certificate involves an opinion of one who must first be
established as an expert witness, it cannot be given weight or
credit unless the doctor who issued it is presented in court to
show his qualifications. It is precluded because the party
against whom it is presented is deprived of the right and
opportunity to cross-examine the person to whom the
statements or writings are attributed. Its executor or author
should be presented as a witness to provide the other party to
the litigation the opportunity to question its contents. Being
mere hearsay evidence, failure to present the author of the
medical certificate renders its contents suspect and of no
probative value,"70 as in this case.
Care Dispensary and Ministry of Health. In Limpangco Sons v.
Yangco77, the Court explained that "[t]here is a difference x x x
between a change in the theory of the case and a shifting of the
incidence of the emphasis placed during the trial or in the
briefs." "Where x x x the theory of the case as set out in the
pleadings remains the theory throughout the progress of the
cause, the change of emphasis from one phase of the case as
presented by one set of facts to another phase made
prominent by another set of facts x x x does not result in a
change of theory x x x".78 In any case, petitioner had already
questioned the validity of these documents in its Position
Paper79 before the MeTC.80 Hence, there is no change of
theory that would preclude petitioner's arguments on this
score.
All told, there being no negligence proven by respondent
through credible and admissible evidence, petitioner cannot be
held liable for damages under Article 2176 of the Civil Code as
above-discussed.
WHEREFORE, the petition is GRANTED. Accordingly, the
Decision dated July 11, 2014 and the Resolution dated February
27, 2015 of the Court of Appeals in CA-G.R. SP No. 125451 are
REVERSED and SET ASIDE, and a NEW ONE is entered,
DISMISSING the complaint of respondent LWV Construction
Corporation for lack of merit.
SO ORDERED.

Similarly, the HCV Confirmatory Test Report issued by the

Ministry of Health of Saudi Arabia should have also been
excluded as evidence. Although the same may be considered a
public document, being an alleged written official act of an
official body of a foreign country,71 the same was not duly
authenticated in accordance with Section 24,72 Rule 132 of the
Rules of Court. While respondent provided a translation73
thereof from the National Commission on Muslim Filipinos,
Bureau of External Relations, Office of the President, the same
was not accompanied by a certificate of the secretary of the
embassy or legation, consul-general, consul, vice-consul, or
consular agent or any officer in the foreign service of the
Philippines stationed in Saudi Arabia, where the record is kept, ACTS CONTRARY TO MORALS
and authenticated by the seal of his office.74
BUENAVENTURA VS CA
To be sure, petitioner - contrary to respondent's contention75 -
has not changed its theory of the case by questioning the AZCUNA, J.:
foregoing documents. As petitioner correctly argued, it merely
amplified its defense76 that it is not liable for negligence when These cases involve a petition for the declaration of nullity of
it further questioned the validity of the issuances of the General marriage, which was filed by petitioner Noel Buenaventura on
July 12, 1992, on the ground of the alleged psychological
incapacity of his wife, Isabel Singh Buenaventura, herein
respondent. After respondent filed her answer, petitioner, with
leave of court, amended his petition by stating that both he and
his wife were psychologically incapacitated to comply with the
essential obligations of marriage. In response, respondent filed
an amended answer denying the allegation that she was
psychologically incapacitated.1
On July 31, 1995, the Regional Trial Court promulgated a
Decision, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered as follows:
1) Declaring and decreeing the marriage entered into between
plaintiff Noel A. Buenaventura and defendant Isabel Lucia
Singh Buenaventura on July 4, 1979, null and void ab initio;
2) Ordering the plaintiff to pay defendant moral damages in the
amount of 2.5 million pesos and exemplary damages of 1
million pesos with 6% interest from the date of this decision
plus attorney’s fees of P100,000.00;
3) Ordering the plaintiff to pay the defendant expenses of
litigation of P50,000.00, plus costs;
4) Ordering the liquidation of the assets of the conjugal
partnership property[,] particularly the plaintiff’s
separation/retirement benefits received from the Far East Bank
[and] Trust Company[,] by ceding, giving and paying to her fifty
percent (50%) of the net amount of P3,675,335.79 or
P1,837,667.89 together with 12% interest per annum from the
date of this decision and one-half (1/2) of his outstanding
shares of stock with Manila Memorial Park and Provident
Group of Companies;
5) Ordering him to give a regular support in favor of his son Javy
Singh Buenaventura in the amount of P15,000.00 monthly,
subject to modification as the necessity arises;
6) Awarding the care and custody of the minor Javy Singh
Buenaventura to his mother, the herein defendant; and
7) Hereby authorizing the defendant to revert back to the use
of her maiden family name Singh.
Let copies of this decision be furnished the appropriate civil
registry and registries of properties.
SO ORDERED.2
Petitioner appealed the above decision to the Court of Appeals.
While the case was pending in the appellate court, respondent
filed a motion to increase the P15,000 monthly support
pendente lite of their son Javy Singh Buenaventura. Petitioner
filed an opposition thereto, praying that it be denied or that
such incident be set for oral argument.3
On September 2, 1996, the Court of Appeals issued a
Resolution increasing the support pendente lite to P20,000.4
Petitioner filed a motion for reconsideration questioning the
said Resolution.5
On October 8, 1996, the appellate court promulgated a
Decision dismissing petitioner’s appeal for lack of merit and
affirming in toto the trial court’s decision.6 Petitioner filed a
motion for reconsideration which was denied. From the
abovementioned Decision, petitioner filed the instant Petition
for Review on Certiorari.
On November 13, 1996, through another Resolution, the Court
of Appeals denied petitioner’s motion for reconsideration of
the September 2, 1996 Resolution, which increased the
monthly support for the son.7 Petitioner filed a Petition for
Certiorari to question these two Resolutions.
On July 9, 1997, the Petition for Review on Certiorari8 and the
Petition for Certiorari9 were ordered consolidated by this
Court.10
In the Petition for Review on Certiorari petitioner claims that
the Court of Appeals decided the case not in accord with law
and jurisprudence, thus:
1. WHEN IT AWARDED DEFENDANT-APPELLEE MORAL
DAMAGES IN THE AMOUNT OF P2.5 MILLION AND
EXEMPLARY DAMAGES OF P1 MILLION, WITH 6% INTEREST
FROM THE DATE OF ITS DECISION, WITHOUT ANY LEGAL
AND MORAL BASIS;
2. WHEN IT AWARDED P100,000.00 ATTORNEY’S FEES AND
P50,000.00 EXPENSES OF LITIGATION, PLUS COSTS, TO
DEFENDANT-APPELLEE, WITHOUT FACTUAL AND LEGAL
BASIS;
3. WHEN IT ORDERED PLAINTIFF-APPELLANT NOEL TO PAY
DEFENDANT-APPELLEE ONE-HALF OR P1,837,667.89 OUT
OF HIS RETIREMENT BENEFITS RECEIVED FROM THE FAR
EAST BANK AND TRUST CO., WITH 12% INTEREST THEREON
FROM THE DATE OF ITS DECISION, NOTWITHSTANDING
THAT SAID RETIREMENT BENEFITS ARE GRATUITOUS AND
EXCLUSIVE PROPERTY OF NOEL, AND ALSO TO DELIVER TO
DEFENDANT-APPELLEE ONE-HALF OF HIS SHARES OF
STOCK WITH THE MANILA MEMORIAL PARK AND THE
PROVIDENT GROUP OF COMPANIES, ALTHOUGH SAID
SHARES OF STOCK WERE ACQUIRED BY NOEL BEFORE HIS
MARRIAGE TO RESPONDENT ISABEL AND ARE, THEREFORE,
AGAIN HIS EXCLUSIVE PROPERTIES; AND
4. WHEN IT AWARDED EXCLUSIVE CARE AND CUSTODY
OVER THE PARTIES’ MINOR CHILD TO DEFENDANT-
APPELLEE WITHOUT ASKING THE CHILD (WHO WAS
ALREADY 13 YEARS OLD AT THAT TIME) HIS CHOICE AS TO
WHOM, BETWEEN HIS TWO PARENTS, HE WOULD LIKE TO
HAVE CUSTODY OVER HIS PERSON.11
In the Petition for Certiorari, petitioner advances the following
contentions:
THE COURT OF APPEALS GRAVELY ABUSED ITS
DISCRETION WHEN IT REFUSED TO SET RESPONDENT’S
MOTION FOR INCREASED SUPPORT FOR THE PARTIES’ SON
FOR HEARING.12
THERE WAS NO NEED FOR THE COURT OF APPEALS TO
INCREASE JAVY’S MONTHLY SUPPORT OF P15,000.00 BEING
GIVEN BY PETITIONER EVEN AT PRESENT PRICES.13
IN RESOLVING RESPONDENT’S MOTION FOR THE INCREASE
OF JAVY’S SUPPORT, THE COURT OF APPEALS SHOULD
HAVE EXAMINED THE LIST OF EXPENSES SUBMITTED BY
RESPONDENT IN THE LIGHT OF PETITIONER’S OBJECTIONS
THERETO, INSTEAD OF MERELY ASSUMING THAT JAVY IS
ENTITLED TO A P5,000 INCREASE IN SUPPORT AS SAID
AMOUNT IS "TOO MINIMAL."14
LIKEWISE, THE COURT OF APPEALS SHOULD HAVE GIVEN
PETITIONER AN OPPORTUNITY TO PROVE HIS PRESENT
INCOME TO SHOW THAT HE CANNOT AFFORD TO
INCREASE JAVY’S SUPPORT.15
With regard to the first issue in the main case, the Court of
Appeals articulated:
On Assignment of Error C, the trial court, after findings of fact
ascertained from the testimonies not only of the parties
particularly the defendant-appellee but likewise, those of the
two psychologists, awarded damages on the basis of Articles
21, 2217 and 2229 of the Civil Code of the Philippines.
Thus, the lower court found that plaintiff-appellant deceived
the defendant-appellee into marrying him by professing true
love instead of revealing to her that he was under heavy
parental pressure to marry and that because of pride he
married defendant-appellee; that he was not ready to enter
into marriage as in fact his career was and always would be his
first priority; that he was unable to relate not only to
defendant-appellee as a husband but also to his son, Javy, as a
father; that he had no inclination to make the marriage work
such that in times of trouble, he chose the easiest way out, that
of leaving defendant–appellee and their son; that he had no
desire to keep defendant-appellee and their son as proved by
his reluctance and later, refusal to reconcile after their
separation; that the aforementioned caused defendant-
appellee to suffer mental anguish, anxiety, besmirched
reputation, sleepless nights not only in those years the parties
were together but also after and throughout their separation.
Plaintiff-appellant assails the trial court’s decision on the
ground that unlike those arising from a breach in ordinary
contracts, damages arising as a consequence of marriage may
not be awarded. While it is correct that there is, as yet, no
decided case by the Supreme Court where damages by reason
of the performance or non-performance of marital obligations
were awarded, it does not follow that no such award for
damages may be made.
Defendant-appellee, in her amended answer, specifically
prayed for moral and exemplary damages in the total amount
of 7 million pesos. The lower court, in the exercise of its
discretion, found full justification of awarding at least half of
what was originally prayed for. We find no reason to disturb the
ruling of the trial court.16
The award by the trial court of moral damages is based on
Articles 2217 and 21 of the Civil Code, which read as follows:
ART. 2217. Moral damages include physical suffering, mental
anguish, fright, serious anxiety, besmirched reputation,
wounded feelings, moral shock, social humiliation, and similar
injury. Though incapable of pecuniary computation, moral
damages may be recovered if they are the proximate result of
the defendant’s wrongful act or omission.
ART. 21. Any person who wilfully causes loss or injury to
another in a manner that is contrary to morals, good customs
or public policy shall compensate the latter for the damage.
The trial court referred to Article 21 because Article 221917 of
the Civil Code enumerates the cases in which moral damages
may be recovered and it mentions Article 21 as one of the
instances. It must be noted that Article 21 states that the
individual must willfully cause loss or injury to another. There is
a need that the act is willful and hence done in complete
freedom. In granting moral damages, therefore, the trial court
and the Court of Appeals could not but have assumed that the
acts on which the moral damages were based were done
willfully and freely, otherwise the grant of moral damages
would have no leg to stand on.
On the other hand, the trial court declared the marriage of the
parties null and void based on Article 36 of the Family Code,
due to psychological incapacity of the petitioner, Noel
Buenaventura. Article 36 of the Family Code states:
A marriage contracted by any party who, at the time of the
celebration, was psychologically incapacitated to comply with
the essential marital obligations of marriage, shall likewise be
void even if such incapacity becomes manifest only after its
solemnization.
Psychological incapacity has been defined, thus:
. . . no less than a mental (not physical) incapacity that causes a
party to be truly incognitive of the basic marital covenants that
concomitantly must be assumed and discharged by the parties
to the marriage which, as so expressed by Article 68 of the
Family Code, include their mutual obligations to live together,
observe love, respect and fidelity and render help and support.
There is hardly any doubt that the intendment of the law has
been to confine the meaning of "psychological incapacity" to
the most serious cases of personality disorders clearly
demonstrative of an utter insensitivity or inability to give
meaning and significance to the marriage. . . .18
The Court of Appeals and the trial court considered the acts of
the petitioner after the marriage as proof of his psychological
incapacity, and therefore a product of his incapacity or inability
to comply with the essential obligations of marriage.
Nevertheless, said courts considered these acts as willful and
hence as grounds for granting moral damages. It is
contradictory to characterize acts as a product of psychological
incapacity, and hence beyond the control of the party because
of an innate inability, while at the same time considering the
same set of acts as willful. By declaring the petitioner as
psychologically incapacitated, the possibility of awarding moral
damages on the same set of facts was negated. The award of
moral damages should be predicated, not on the mere act of
entering into the marriage, but on specific evidence that it was
done deliberately and with malice by a party who had
knowledge of his or her disability and yet willfully concealed
the same. No such evidence appears to have been adduced in
this case.
For the same reason, since psychological incapacity means that
one is truly incognitive of the basic marital covenants that one
must assume and discharge as a consequence of marriage, it
removes the basis for the contention that the petitioner
purposely deceived the private respondent. If the private
respondent was deceived, it was not due to a willful act on the
part of the petitioner. Therefore, the award of moral damages
was without basis in law and in fact.
Since the grant of moral damages was not proper, it follows
that the grant of exemplary damages cannot stand since the
Civil Code provides that exemplary damages are imposed in
addition to moral, temperate, liquidated or compensatory
damages.19
With respect to the grant of attorney’s fees and expenses of
litigation the trial court explained, thus:
Regarding Attorney’s fees, Art. 2208 of the Civil Code
authorizes an award of attorney’s fees and expenses of
litigation, other than judicial costs, when as in this case the
plaintiff’s act or omission has compelled the defendant to
litigate and to incur expenses of litigation to protect her
interest (par. 2), and where the Court deems it just and
equitable that attorney’s fees and expenses of litigation should
be recovered. (par. 11)20
The Court of Appeals reasoned as follows:
On Assignment of Error D, as the award of moral and
exemplary damages is fully justified, the award of attorney’s
fees and costs of litigation by the trial court is likewise fully
justified.21
The acts or omissions of petitioner which led the lower court to
deduce his psychological incapacity, and his act in filing the
complaint for the annulment of his marriage cannot be
considered as unduly compelling the private respondent to
litigate, since both are grounded on petitioner’s psychological
incapacity, which as explained above is a mental incapacity
causing an utter inability to comply with the obligations of
marriage. Hence, neither can be a ground for attorney’s fees
and litigation expenses. Furthermore, since the award of moral
and exemplary damages is no longer justified, the award of
attorney’s fees and expenses of litigation is left without basis.
Anent the retirement benefits received from the Far East Bank
and Trust Co. and the shares of stock in the Manila Memorial
Park and the Provident Group of Companies, the trial court
said:
The third issue that must be resolved by the Court is what to do
with the assets of the conjugal partnership in the event of
declaration of annulment of the marriage. The Honorable
Supreme Court has held that the declaration of nullity of
marriage carries ipso facto a judgment for the liquidation of
property (Domingo v. Court of Appeals, et al., G.R. No. 104818,
Sept. 17, 1993, 226 SCRA, pp. 572 – 573, 586). Thus, speaking
through Justice Flerida Ruth P. Romero, it was ruled in this
case:
When a marriage is declared void ab initio, the law states that
the final judgment therein shall provide for the liquidation,
partition and distribution of the properties of the spouses, the
custody and support of the common children and the delivery
of their presumptive legitimes, unless such matters had been
adjudicated in the previous proceedings.
The parties here were legally married on July 4, 1979, and
therefore, all property acquired during the marriage, whether
the acquisition appears to have been made, contracted or
registered in the name of one or both spouses, is presumed to
be conjugal unless the contrary is proved (Art. 116, New Family
Code; Art. 160, Civil Code). Art. 117 of the Family Code
enumerates what are conjugal partnership properties. Among
others they are the following:
1) Those acquired by onerous title during the marriage at the
expense of the common fund, whether the acquisition be for
the partnership, or for only one of the spouses;
2) Those obtained from the labor, industry, work or profession
of either or both of the spouses;
3) The fruits, natural, industrial, or civil, due or received during
the marriage from the common property, as well as the net
fruits from the exclusive property of each spouse. . . .
Applying the foregoing legal provisions, and without prejudice
to requiring an inventory of what are the parties’ conjugal
properties and what are the exclusive properties of each
spouse, it was disclosed during the proceedings in this case that
the plaintiff who worked first as Branch Manager and later as
Vice-President of Far East Bank & Trust Co. received
separation/retirement package from the said bank in the
amount of P3,701,500.00 which after certain deductions
amounting to P26,164.21 gave him a net amount of
P3,675,335.79 and actually paid to him on January 9, 1995
(Exhs. 6, 7, 8, 9, 10, 11). Not having shown debts or obligations
other than those deducted from the said retirement/separation
pay, under Art. 129 of the Family Code "The net remainder of
the conjugal partnership properties shall constitute the profits,
which shall be divided equally between husband and wife,
unless a different proportion or division was agreed upon in the
marriage settlement or unless there has been a voluntary
waiver or forfeiture of such share as provided in this Code." In
this particular case, however, there had been no marriage
settlement between the parties, nor had there been any
voluntary waiver or valid forfeiture of the defendant wife’s
share in the conjugal partnership properties. The previous
cession and transfer by the plaintiff of his one-half (1/2) share in
their residential house and lot covered by T.C.T. No. S-35680 of
the Registry of Deeds of Parañaque, Metro Manila, in favor of
the defendant as stipulated in their Compromise Agreement
dated July 12, 1993, and approved by the Court in its Partial
Decision dated August 6, 1993, was actually intended to be in
full settlement of any and all demands for past support. In
reality, the defendant wife had allowed some concession in
favor of the plaintiff husband, for were the law strictly to be
followed, in the process of liquidation of the conjugal assets,
the conjugal dwelling and the lot on which it is situated shall,
unless otherwise agreed upon by the parties, be adjudicated to
the spouse with whom their only child has chosen to remain
(Art. 129, par. 9). Here, what was done was one-half (1/2)
portion of the house was ceded to defendant so that she will
not claim anymore for past unpaid support, while the other half
was transferred to their only child as his presumptive legitime.
Consequently, nothing yet has been given to the defendant
wife by way of her share in the conjugal properties, and it is but
just, lawful and fair, that she be given one-half (1/2) share of the
separation/retirement benefits received by the plaintiff the
same being part of their conjugal partnership properties having
been obtained or derived from the labor, industry, work or
profession of said defendant husband in accordance with Art.
117, par. 2 of the Family Code. For the same reason, she is
entitled to one-half (1/2) of the outstanding shares of stock of
the plaintiff husband with the Manila Memorial Park and the
Provident Group of Companies.22
The Court of Appeals articulated on this matter as follows:
On Assignment of Error E, plaintiff-appellant assails the order
of the trial court for him to give one-half of his
separation/retirement benefits from Far East Bank & Trust
Company and half of his outstanding shares in Manila Memorial
Park and Provident Group of Companies to the defendant-
appellee as the latter’s share in the conjugal partnership.
On August 6, 1993, the trial court rendered a Partial Decision
approving the Compromise Agreement entered into by the
parties. In the same Compromise Agreement, the parties had
agreed that henceforth, their conjugal partnership is dissolved.
Thereafter, no steps were taken for the liquidation of the
conjugal partnership.
Finding that defendant-appellee is entitled to at least half of
the separation/retirement benefits which plaintiff-appellant
received from Far East Bank & Trust Company upon his
retirement as Vice-President of said company for the reason
that the benefits accrued from plaintiff–appellant’s service for
the bank for a number of years, most of which while he was
married to defendant-appellee, the trial court adjudicated the
same. The same is true with the outstanding shares of plaintiff-
appellant in Manila Memorial Park and Provident Group of
Companies. As these were acquired by the plaintiff-appellant at
the time he was married to defendant-appellee, the latter is
entitled to one-half thereof as her share in the conjugal
partnership. We find no reason to disturb the ruling of the trial
court.23
Since the present case does not involve the annulment of a
bigamous marriage, the provisions of Article 50 in relation to
Articles 41, 42 and 43 of the Family Code, providing for the
dissolution of the absolute community or conjugal partnership
of gains, as the case may be, do not apply. Rather, the general
rule applies, which is that in case a marriage is declared void ab
initio, the property regime applicable and to be liquidated,
partitioned and distributed is that of equal co-ownership.
In Valdes v. Regional Trial Court, Branch 102, Quezon City,24
this Court expounded on the consequences of a void marriage
on the property relations of the spouses and specified the
applicable provisions of law:
The trial court correctly applied the law. In a void marriage,
regardless of the cause thereof, the property relations of the
parties during the period of cohabitation is governed by the
provisions of Article 147 or Article 148, such as the case may be,
of the Family Code. Article 147 is a remake of Article 144 of the
Civil Code as interpreted and so applied in previous cases; it
provides:
ART. 147. When a man and a woman who are capacitated to
marry each other, live exclusively with each other as husband
and wife without the benefit of marriage or under a void
marriage, their wages and salaries shall be owned by them in
equal shares and the property acquired by both of them
through their work or industry shall be governed by the rules on
co-ownership.
In the absence of proof to the contrary, properties acquired
while they lived together shall be presumed to have been
obtained by their joint efforts, work or industry, and shall be
owned by them in equal shares. For purposes of this Article, a
party who did not participate in the acquisition by the other
party of any property shall be deemed to have contributed
jointly in the acquisition thereof if the former's efforts consisted
in the care and maintenance of the family and of the
household.
Neither party can encumber or dispose by acts inter vivos of his
or her share in the property acquired during cohabitation and
owned in common, without the consent of the other, until after
the termination of their cohabitation.
When only one of the parties to a void marriage is in good faith,
the share of the party in bad faith in the co-ownership shall be
forfeited in favor of their common children. In case of default of
or waiver by any or all of the common children or their
descendants, each vacant share shall belong to the respective
surviving descendants. In the absence of descendants, such
share shall belong to the innocent party. In all cases, the
forfeiture shall take place upon termination of the
cohabitation.
This peculiar kind of co-ownership applies when a man and a
woman, suffering no legal impediment to marry each other, so
exclusively live together as husband and wife under a void
marriage or without the benefit of marriage. The term
"capacitated" in the provision (in the first paragraph of the law)
refers to the legal capacity of a party to contract marriage, i.e.,
any "male or female of the age of eighteen years or upwards
not under any of the impediments mentioned in Articles 37 and
38" of the Code.
Under this property regime, property acquired by both spouses
through their work and industry shall be governed by the rules
on equal co-ownership. Any property acquired during the union
is prima facie presumed to have been obtained through their
joint efforts. A party who did not participate in the acquisition
of the property shall still be considered as having contributed
thereto jointly if said party's "efforts consisted in the care and
maintenance of the family household." Unlike the conjugal
partnership of gains, the fruits of the couple's separate
property are not included in the co-ownership.
Article 147 of the Family Code, in substance and to the above
extent, has clarified Article 144 of the Civil Code; in addition,
the law now expressly provides that —
(a) Neither party can dispose or encumber by act[s] inter vivos
[of] his or her share in co-ownership property, without the
consent of the other, during the period of cohabitation; and
(b) In the case of a void marriage, any party in bad faith shall
forfeit his or her share in the co-ownership in favor of their
common children; in default thereof or waiver by any or all of
the common children, each vacant share shall belong to the
respective surviving descendants, or still in default thereof, to
the innocent party. The forfeiture shall take place upon the
termination of the cohabitation or declaration of nullity of the
marriage.
In deciding to take further cognizance of the issue on the
settlement of the parties' common property, the trial court
acted neither imprudently nor precipitately; a court which had
jurisdiction to declare the marriage a nullity must be deemed
likewise clothed with authority to resolve incidental and
consequential matters. Nor did it commit a reversible error in
ruling that petitioner and private respondent own the "family
home" and all their common property in equal shares, as well as
in concluding that, in the liquidation and partition of the
property owned in common by them, the provisions on co-
ownership under the Civil Code, not Articles 50, 51 and 52, in
relation to Articles 102 and 129, of the Family Code, should
aptly prevail. The rules set up to govern the liquidation of either
the absolute community or the conjugal partnership of gains,
the property regimes recognized for valid and voidable
marriages (in the latter case until the contract is annulled), are
irrelevant to the liquidation of the co-ownership that exists
between common-law spouses. The first paragraph of Article
50 of the Family Code, applying paragraphs (2), (3), (4) and (5)
of Article 43, relates only, by its explicit terms, to voidable
marriages and, exceptionally, to void marriages under Article
40 of the Code, i.e., the declaration of nullity of a subsequent
marriage contracted by a spouse of a prior void marriage
before the latter is judicially declared void. The latter is a
special rule that somehow recognizes the philosophy and an
old doctrine that void marriages are inexistent from the very
beginning and no judicial decree is necessary to establish their
nullity. In now requiring for purposes of remarriage, the
declaration of nullity by final judgment of the previously
contracted void marriage, the present law aims to do away with
any continuing uncertainty on the status of the second
marriage. It is not then illogical for the provisions of Article 43,
in relation to Articles 41 and 42, of the Family Code, on the
effects of the termination of a subsequent marriage contracted
during the subsistence of a previous marriage to be made
applicable pro hac vice. In all other cases, it is not to be
assumed that the law has also meant to have coincident
property relations, on the one hand, between spouses in valid
and voidable marriages (before annulment) and, on the other,
between common-law spouses or spouses of void marriages,
leaving to ordain, in the latter case, the ordinary rules on co-
ownership subject to the provision of Article 147 and Article 148
of the Family Code. It must be stressed, nevertheless, even as it
may merely state the obvious, that the provisions of the Family
Code on the "family home," i.e., the provisions found in Title V,
Chapter 2, of the Family Code, remain in force and effect
regardless of the property regime of the spouses.25
Since the properties ordered to be distributed by the court a
quo were found, both by the trial court and the Court of
Appeals, to have been acquired during the union of the parties,
the same would be covered by the co-ownership. No fruits of a
separate property of one of the parties appear to have been
included or involved in said distribution. The liquidation,
partition and distribution of the properties owned in common
by the parties herein as ordered by the court a quo should,
therefore, be sustained, but on the basis of co-ownership and
not of the regime of conjugal partnership of gains.
As to the issue on custody of the parties over their only child,
Javy Singh Buenaventura, it is now moot since he is about to
turn twenty-five years of age on May 27, 200526 and has,
therefore, attained the age of majority.
With regard to the issues on support raised in the Petition for
Certiorari, these would also now be moot, owing to the fact
that the son, Javy Singh Buenaventura, as previously stated,
has attained the age of majority.
WHEREFORE, the Decision of the Court of Appeals dated
October 8, 1996 and its Resolution dated December 10, 1996
which are contested in the Petition for Review (G.R. No.
127449), are hereby MODIFIED, in that the award of moral and
exemplary damages, attorney’s fees, expenses of litigation and
costs are deleted. The order giving respondent one-half of the
retirement benefits of petitioner from Far East Bank and Trust
Co. and one-half of petitioner’s shares of stock in Manila
Memorial Park and in the Provident Group of Companies is
sustained but on the basis of the liquidation, partition and
distribution of the co-ownership and not of the regime of
conjugal partnership of gains. The rest of said Decision and
Resolution are AFFIRMED.
The Petition for Review on Certiorari (G.R. No. 127358) contesting
the Court of Appeals’ Resolutions of September 2, 1996 and
November 13, 1996 which increased the support pendente lite in
favor of the parties’ son, Javy Singh Buenaventura, is now MOOT
and ACADEMIC and is, accordingly, DISMISSED. SO ORDERED.
UNJUST ENRICHMENT
FILINVEST VS NGILAY
PERALTA, J.:
For this Court's consideration is the Petition for Review on
Certiorari under Rule 45, dated November 9, 2006, of petitioner
Filinvest Land, Inc., which seeks to set aside the Decision1
dated March 30, 2006 and Resolution2 dated September 18,
2006 of the Court of Appeals (CA) partially reversing the
Decision3 dated October 1, 2003 of the Regional Trial Court,
Las Piñas, Branch 253 (RTC).
The factual antecedents, as found in the records follow.
Respondents were grantees of agricultural public lands located
in Tambler, General Santos City through Homestead and Fee
patents sometime in 1986 and 1991 which are covered by and
specifically described in the following Original Certificates of
Title issued by the Register of Deeds of General Santos City:
X XX
Negotiations were made by petitioner, represented by Lina de
Guzman-Ferrer with the patriarch of the Ngilays, Hadji Gulam
Ngilay sometime in 1995. Eventually, a Deed of Conditional
Sale of the above- enumerated properties in favor of petitioner
Filinvest Land, Inc. was executed. Upon its execution,
respondents were asked to deliver to petitioner the original
owner's duplicate copy of the certificates of title of their
respective properties. Respondents received the downpayment
for the properties on October 28, 1995.
A few days after the execution of the aforestated deeds and the
delivery of the corresponding documents to petitioner,
respondents came to know that the sale of their properties was
null and void, because it was done within the period that they
were not allowed to do so and that the sale did not have the
approval of the Secretary of the Department of Environment
and Natural Resources (DENR) prompting them to file a case
for the declaration of nullity of the deeds of conditional and
absolute sale of the questioned properties and the grant of
right of way with the RTC, Las Piñas, Branch 253.
On the other hand, petitioner claims that sometime in 1995,
the representative of Hadji Ngilay approached petitioner to
propose the sale of a portion of his properties. Thereafter,
representatives of petitioner flew to General Santos City from
Manila to conduct an ocular inspection of the subject
properties. Petitioner was willing to purchase the properties
but seeing that some of the properties were registered as land
grants through homestead patents, representatives of
petitioner informed Ngilay that they would return to General
Santos City in a few months to finalize the sale as ten (10)
certificates of title were issued on November 24, 1991.
According to petitioner, Ngilay and his children prevailed upon
the representatives of petitioner to make an advance payment.
To accommodate the Ngilays, petitioner acceded to making an
advance with the understanding that petitioner could demand
anytime the return of the advance payment should Ngilay not
be able to comply with the conditions of the sale. The Ngilays
likewise undertook to secure the necessary approvals of the
DENR before the consummation of the sale.
The RTC ruled in favor of Filinvest Land, Inc. and upheld the
sale of all the properties in litigation. It found that the sale of
those properties whose original certificates of title were issued
by virtue of the 1986 Patents was valid, considering that the
prohibitory period ended in 1991, or way before the transaction
took place. As to those patents awarded in 1991, the same
court opined that since those properties were the subject of a
deed of conditional sale, compliance with those conditions is
necessary for there to be a perfected contract between the
parties. The RTC also upheld the grant of right of way as it
adjudged that the right of way agreement showed that the
right of way was granted to provide access from the highway to
the properties to be purchased. The dispositive portion of the
Decision dated October 1, 2003 reads:
WHEREFORE, premises considered, the Court upholds the sale
of all the properties in litigation. It likewise upholds the grant of
right of way in favor of the respondent. Consequently, the
petition is DISMISSED.
No pronouncement as to damages for failure to prove the
same.
Costs against the petitioners. SO ORDERED.4
Respondents elevated the case to the CA in which the latter
modified the judgment of the RTC.1âwphi1 While the CA
upheld the validity of the sale of the properties the patents of
which were awarded in 1986, including the corresponding grant
of right of way for the same lots, it nullified the disposition of
those properties granted through patents in 1991 and the right
of way on the same properties. As to the "1991 Patents," the CA
ruled that the contract of sale between the parties was a
perfected contract, hence, the parties entered into a prohibited
conveyance of a homestead within the prohibitive period of
five years from the issuance of the patent. The CA Decision
dated March 30, 2006 disposed the case as follows:
WHEREFORE, the assailed Decision dated October 1, 2003 is
MODIFIED:
a) The Deed of Conditional Sale and Deed of Absolute Sale for
the properties covered by the "1991 Patents", as well as the
Right of Way Agreement thereto, are declared null and void.
The Register of Deeds of General Santos City is consequently
directed to cancel the certificates of title covered by the "1991
Patents" issued in favor of appellee Filinvest and to issue new
titles in favor of herein appellants.
b) The sale of the properties covered by the "1986 Patents",
including the corresponding grant of way for said lots, are
declared valid.
SO ORDERED.5
Petitioners filed a Motion for Partial Reconsideration, but it was
denied by the CA.
Hence, the present petition.
The grounds relied upon are:
1.
A CONDITIONAL SALE INVOLVING THE 1991 PATENTS DID
NOT VIOLATE THE PROHIBITION AGAINST ALIENATION OF
HOMESTEADS UNDER THE PUBLIC LAND ACT SINCE NO
ACTUAL TRANSFER OR DISPOSITION WAS PERFECTED
UNTIL ALL THE CONDITIONS OF THE DEED ARE FULFILLED.
2.
REGISTRATION IS THE OPERATIVE ACT THAT CONVEYS OR
DISPOSES RIGHTS IN REAL PROPERTY. BEING
UNREGISTERED, THE DEED OF CONDITIONAL SALE DID
NOT CONVEY OR DISPOSE OF THE 1991 HOMESTEADS OR
ANY RIGHTS THEREIN IN VIOLATION OF THE PUBLIC LAND
ACT.
3.
ASSUMING THE NULLITY OF THE SALE OF THE 1991
PATENTS, THE HONORABLE COURT OF APPEALS SHOULD
HAVE ORDERED RESPONDENTS AS A MATTER OF LAW TO
RETURN TO PETITIONERS WHAT THEY HAVE RECEIVED.6
In their Comment7 dated March 5, 2007, respondents stated
the following counter-arguments:
(1) The Honorable Court of Appeals did not err in holding that
the Deed of Conditional Sale and Deed of Absolute Sale for the
properties covered by the 1991 Patents, as well as the Right of
Way Agreement thereto is null and void for the simplest reason
that the said transactions were volatile of the Public Land Act.
(2) The questions raised by the Petitioner, Filinvest Land Inc.
(FLI) are unsubstantial to require consideration.8
In its Reply9 dated July 30, 2007, petitioner insists that the
prohibition against alienation and disposition of land covered
by Homestead Patents is a prohibition against the actual loss of
the homestead within the five-year prohibitory period, not
against all contracts including those that do not result in such
an actual loss of ownership or possession. It also points out that
respondents themselves admit that the transfer certificates of
title covering the ten parcels of land are all dated 1998, which
confirms its declaration that the lands covered by 1991
Homestead Patents were not conveyed to Filinvest until after
the five-year prohibitory period.
The petition is unmeritorious.
The five-year prohibitory period following the issuance of the
homestead patent is provided under Section 118 of
Commonwealth Act No. 141, as amended by Commonwealth
Act No. 456, otherwise known as the Public Land Act.10 It
bears stressing that the law was enacted to give the
homesteader or patentee every chance to preserve for himself
and his family the land that the State had gratuitously given to
him as a reward for his labour in cleaning and cultivating it.11
Its basic objective, as the Court had occasion to stress, is to
promote public policy that is to provide home and decent living
for destitute, aimed at providing a class of independent small
landholders which is the bulwark of peace and order.12 Hence,
any act which would have the effect of removing the property
subject of the patent from the hands of a grantee will be struck
down for being violative of the law.13
In the present case, the negotiations for the purchase of the
properties covered by the patents issued in 1991 were made in
1995 and, eventually, an undated Deed of Conditional Sale was
executed. On October 28, 1995, respondents received the
downpayment of P14,000.000.00 for the properties covered by
the patents issued in 1991. Applying the five-year prohibition,
the properties covered by the patent issued on November 24,
1991 could only be alienated after November 24, 1996.
Therefore, the sale, having been consummated on October 28,
1995, or within the five-year prohibition, is as ruled by the CA,
void.
Petitioner argues that the correct formulation of the issue is
not whether there was a perfected contract between the
parties during the period of prohibition, but whether by such amount having been declared void, respondents have the duty
deed of conditional sale there was "alienation or encumbrance" to return the down payment as they no longer have the right to
within the contemplation of the law. This is wrong. The keep it. The principle of unjust enrichment essentially
prohibition does not distinguish between consummated and contemplates payment when there is no duty to pay, and the
executory sale. The conditional sale entered into by the parties person who receives the payment has no right to receive it.20
is still a conveyance of the homestead patent. As correctly As found by the CA and undisputed by the parties, the amount
ruled by the CA, citing Ortega v. Tan:14 or the down payment made is P14,000,000.00 which shall also
be the amount to be returned by respondents.
And, even assuming that the disputed sale was not yet
perfected or consummated, still, the transaction cannot be WHEREFORE, the Petition for Review on Certiorari dated
validated. The prohibition of the law on the sale or November 9, 2006 or petitioner Filinvest Land, Inc. is hereby
encumbrance of the homestead within five years after the DENIED. Consequently, the Decision dated March 30, 2006 and
grant is MANDATORY. The purpose of the law is to promote a Resolution dated September 18, 2006 or the Court of Appeals
definite policy, i.e., "to preserve and keep in the family of the are hereby AFFIRMED with the MODIFICATION that
homesteader that portion of the public land which the State respondents return the amount of P14,000,000.00 given by
has gratuitously given to him." Thus, the law does not petitioner as down payment for the sale which is ruled to be
distinguish between executory and consummated sales. Where void ab initio.
the sale of a homestead was perfected within the prohibitory
period of five years, the fact that the formal deed of sale was SO ORDERED.
executed after the expiration of the staid period DID NOT and
COULD NOT legalize a contract that was void from its
inception. To hold valid such arrangement would be to throw
the door open to all possible fraudulent subterfuges and
schemes which persons interested in the land given to a
homesteader may devise in circumventing and defeating the
legal provisions prohibiting their alienation within five years
from the issuance of the patent.15
To repeat, the conveyance of a homestead before the
expiration of the five-year prohibitory period following the
issuance of the homestead patent is null and void and cannot
be enforced, for it is not within the competence of any citizen
to barter away what public policy by law seeks to preserve.16
Nevertheless, petitioner does not err in seeking the return of
the down payment as a consequence of the sale having been
declared void. The rule is settled that the declaration of nullity
of a contract which is void ab initio operates to restore things to
the state and condition in which they were found before the
execution thereof.17 Petitioner is correct in its argument that
allowing respondents to keep the amount received from
petitioner is tantamount to judicial acquiescence to unjust
enrichment. Unjust enrichment exists "when a person unjustly
retains a benefit to the loss of another, or when a person
retains money or property of another against the fundamental
principles of justice, equity and good conscience."18 There is
unjust enrichment under Article 22 of the Civil Code when (1) a
person is unjustly benefited, and (2) such benefit is derived at
the expense of or with damages to another.19 Thus, the sale GONZALO VS TERNATE JR.
which created the obligation of petitioner to pay the agreed BERSAMIN, J.:
The doctrine of in pari delicto which stipulates that the guilty
parties to an illegal contract are not entitled to any relief,
cannot prevent a recovery if doing so violates the public policy
against unjust enrichment.
Antecedents
After the Department of Public Works and Highways (DPWH)
had awarded on July 22, 1997 the contract for the improvement
of the Sadsadan-Maba-ay Section of the Mountain Province-
Benguet Road in the total amount of 7 014 963 33 to his
company, Gonzalo Construction,1 petitioner Domingo Gonzalo
(Gonzalo) subcontracted to respondent John Tarnate, Jr.
(Tarnate) on October 15, 1997, the supply of materials and
labor for the project under the latter s business known as JNT
Aggregates. Their agreement stipulated, among others, that
Tarnate would pay to Gonzalo eight percent and four percent
of the contract price, respectively, upon Tarnate s first and
second billing in the project.2
In furtherance of their agreement, Gonzalo executed on April 6,
1999 a deed of assignment whereby he, as the contractor, was
assigning to Tarnate an amount equivalent to 10% of the total
collection from the DPWH for the project. This 10% retention
fee (equivalent to ₱233,526.13) was the rent for Tarnate’s
equipment that had been utilized in the project. In the deed of
assignment, Gonzalo further authorized Tarnate to use the
official receipt of Gonzalo Construction in the processing of the
documents relative to the collection of the 10% retention fee
and in encashing the check to be issued by the DPWH for that
purpose.3 The deed of assignment was submitted to the DPWH
on April 15, 1999. During the processing of the documents for
the retention fee, however, Tarnate learned that Gonzalo had
unilaterally rescinded the deed of assignment by means of an
affidavit of cancellation of deed of assignment dated April 19,
1999 filed in the DPWH on April 22, 1999;4 and that the
disbursement voucher for the 10% retention fee had then been
issued in the name of Gonzalo, and the retention fee released
to him.5
Tarnate demanded the payment of the retention fee from
Gonzalo, but to no avail. Thus, he brought this suit against
Gonzalo on September 13, 1999 in the Regional Trial Court
(RTC) in Mountain Province to recover the retention fee of
₱233,526.13, moral and exemplary damages for breach of
contract, and attorney’s fees.6
In his answer, Gonzalo admitted the deed of assignment and
the authority given therein to Tarnate, but averred that the
project had not been fully implemented because of its
cancellation by the DPWH, and that he had then revoked the
deed of assignment. He insisted that the assignment could not
stand independently due to its being a mere product of the
subcontract that had been based on his contract with the
DPWH; and that Tarnate, having been fully aware of the
illegality and ineffectuality of the deed of assignment from the
time of its execution, could not go to court with unclean hands
to invoke any right based on the invalid deed of assignment or
on the product of such deed of assignment.7
Ruling of the RTC
On January 26, 2001, the RTC, opining that the deed of
assignment was a valid and binding contract, and that Gonzalo
must comply with his obligations under the deed of
assignment, rendered judgment in favor of Tarnate as follows:
WHEREFORE, premises considered and as prayed for by the
plaintiff, John Tarnate, Jr. in his Complaint for Sum of Money,
Breach of Contract With Damages is hereby RENDERED in his
favor and against the above-named defendant Domingo
Gonzalo, the Court now hereby orders as follows:
1. Defendant Domingo Gonzalo to pay the Plaintiff, John
Tarnate, Jr., the amount of TWO HUNDRED THIRTY THREE
THOUSAND FIVE HUNDRED TWENTY SIX and 13/100 PESOS
(₱233,526.13) representing the rental of equipment;
2. Defendant to pay Plaintiff the sum of THIRTY THOUSAND
(₱30,000.00) PESOS by way of reasonable Attorney’s Fees for
having forced/compelled the plaintiff to litigate and engage the
services of a lawyer in order to protect his interest and to
enforce his right. The claim of the plaintiff for attorney’s fees in
the amount of FIFTY THOUSAND PESOS (₱50,000.00) plus
THREE THOUSAND PESOS (₱3,000.00) clearly appears to be
unconscionable and therefore reduced to Thirty Thousand
Pesos (₱30,000.00) as aforestated making the same to be
reasonable;
3. Defendant to pay Plaintiff the sum of FIFTEEN THOUSAND
PESOS (₱15,000.00) by way of litigation expenses;
4. Defendant to pay Plaintiff the sum of TWENTY THOUSAND
PESOS (₱20,000.00) for moral damages and for the breach of
contract; and
5. To pay the cost of this suit.
Award of exemplary damages in the instant case is not
warranted for there is no showing that the defendant acted in a
wanton, fraudulent, reckless, oppressive or malevolent manner
analogous to the case of Xentrex Automotive, Inc. vs. Court of
Appeals, 291 SCRA 66.8
Gonzalo appealed to the Court of Appeals (CA).
Decision of the CA
On February 18, 2003, the CA affirmed the RTC.9
Although holding that the subcontract was an illegal
agreement due to its object being specifically prohibited by
Section 6 of Presidential Decree No. 1594; that Gonzalo and
Tarnate were guilty of entering into the illegal contract in
violation of Section 6 of Presidential Decree No. 1594; and that
the deed of assignment, being a product of and dependent on
the subcontract, was also illegal and unenforceable, the CA did
not apply the doctrine of in pari delicto, explaining that the
doctrine applied only if the fault of one party was more or less
equivalent to the fault of the other party. It found Gonzalo to
be more guilty than Tarnate, whose guilt had been limited to
the execution of the two illegal contracts while Gonzalo had
gone to the extent of violating the deed of assignment. It
declared that the crediting of the 10% retention fee equivalent
to ₱233,256.13 to his account had unjustly enriched Gonzalo;
and ruled, accordingly, that Gonzalo should reimburse Tarnate
in that amount because the latter’s equipment had been
utilized in the project.
Upon denial of his motion for reconsideration,10 Gonzalo has
now come to the Court to seek the review and reversal of the
decision of the CA.
Issues
Gonzalo contends that the CA erred in affirming the RTC
because: (1) both parties were in pari delicto; (2) the deed of
assignment was void; and (3) there was no compliance with the
arbitration clause in the subcontract.
Gonzalo submits in support of his contentions that the
subcontract and the deed of assignment, being specifically
prohibited by law, had no force and effect; that upon finding
both him and Tarnate guilty of violating the law for executing
the subcontract, the RTC and the CA should have applied the
rule of in pari delicto, to the effect that the law should not aid
either party to enforce the illegal contract but should leave
them where it found them; and that it was erroneous to accord
to the parties relief from their predicament.11
Ruling
We deny the petition for review, but we delete the grant of
moral damages, attorney’s fees and litigation expenses.
There is no question that every contractor is prohibited from
subcontracting with or assigning to another person any
contract or project that he has with the DPWH unless the
DPWH Secretary has approved the subcontracting or
assignment. This is pursuant to Section 6 of Presidential Decree
No. 1594, which provides:
Section 6. Assignment and Subcontract. – The contractor shall
not assign, transfer, pledge, subcontract or make any other
disposition of the contract or any part or interest therein except
with the approval of the Minister of Public Works,
Transportation and Communications, the Minister of Public
Highways, or the Minister of Energy, as the case may be.
Approval of the subcontract shall not relieve the main
contractor from any liability or obligation under his contract
with the Government nor shall it create any contractual relation
between the subcontractor and the Government.
Gonzalo, who was the sole contractor of the project in
question, subcontracted the implementation of the project to
Tarnate in violation of the statutory prohibition. Their
subcontract was illegal, therefore, because it did not bear the
approval of the DPWH Secretary. Necessarily, the deed of
assignment was also illegal, because it sprung from the
subcontract. As aptly observed by the CA:
x x x. The intention of the parties in executing the Deed of
Assignment was merely to cover up the illegality of the sub-
contract agreement. They knew for a fact that the DPWH will
not allow plaintiff-appellee to claim in his own name under the
Sub-Contract Agreement.
Obviously, without the Sub-Contract Agreement there will be
no Deed of Assignment to speak of. The illegality of the Sub-
Contract Agreement necessarily affects the Deed of
Assignment because the rule is that an illegal agreement
cannot give birth to a valid contract. To rule otherwise is to
sanction the act of entering into transaction the object of which
is expressly prohibited by law and thereafter execute an
apparently valid contract to subterfuge the illegality. The legal
proscription in such an instance will be easily rendered
nugatory and meaningless to the prejudice of the general
public.12
Under Article 1409 (1) of the Civil Code, a contract whose
cause, object or purpose is contrary to law is a void or inexistent
contract. As such, a void contract cannot produce a valid one.13
To the same effect is Article 1422 of the Civil Code, which
declares that "a contract, which is the direct result of a previous
illegal contract, is also void and inexistent."
We do not concur with the CA’s finding that the guilt of Tarnate
for violation of Section 6 of Presidential Decree No. 1594 was
lesser than that of Gonzalo, for, as the CA itself observed,
Tarnate had voluntarily entered into the agreements with
Gonzalo.14 Tarnate also admitted that he did not participate in
the bidding for the project because he knew that he was not
authorized to contract with the DPWH.15 Given that Tarnate
was a businessman who had represented himself in the
subcontract as "being financially and organizationally sound
and established, with the necessary personnel and equipment
for the performance of the project,"16 he justifiably presumed
to be aware of the illegality of his agreements with Gonzalo.
For these reasons, Tarnate was not less guilty than Gonzalo.
According to Article 1412 (1) of the Civil Code, the guilty parties
to an illegal contract cannot recover from one another and are
not entitled to an affirmative relief because they are in pari
delicto or in equal fault. The doctrine of in pari delicto is a
universal doctrine that holds that no action arises, in equity or
at law, from an illegal contract; no suit can be maintained for its
specific performance, or to recover the property agreed to be
sold or delivered, or the money agreed to be paid, or damages
for its violation; and where the parties are in pari delicto, no
affirmative relief of any kind will be given to one against the
other.17
Nonetheless, the application of the doctrine of in pari delicto is
not always rigid.1âwphi1 An accepted exception arises when its
application contravenes well-established public policy.18 In this
jurisdiction, public policy has been defined as "that principle of
the law which holds that no subject or citizen can lawfully do
that which has a tendency to be injurious to the public or
against the public good."19
Unjust enrichment exists, according to Hulst v. PR Builders,
Inc.,20 "when a person unjustly retains a benefit at the loss of
another, or when a person retains money or property of
another against the fundamental principles of justice, equity
and good conscience." The prevention of unjust enrichment is a
recognized public policy of the State, for Article 22 of the Civil
Code explicitly provides that "[e]very person who through an
act of performance by another, or any other means, acquires or
comes into possession of something at the expense of the
latter without just or legal ground, shall return the same to
him." It is well to note that Article 22 "is part of the chapter of
the Civil Code on Human Relations, the provisions of which
were formulated as basic principles to be observed for the
rightful relationship between human beings and for the
stability of the social order; designed to indicate certain norms
that spring from the fountain of good conscience; guides for
human conduct that should run as golden threads through
society to the end that law may approach its supreme ideal
which is the sway and dominance of justice."21
There is no question that Tarnate provided the equipment,
labor and materials for the project in compliance with his
obligations under the subcontract and the deed of assignment;
and that it was Gonzalo as the contractor who received the
payment for his contract with the DPWH as well as the 10%
retention fee that should have been paid to Tarnate pursuant to
the deed of assignment.22 Considering that Gonzalo refused
despite demands to deliver to Tarnate the stipulated 10%
retention fee that would have compensated the latter for the
use of his equipment in the project, Gonzalo would be unjustly
enriched at the expense of Tarnate if the latter was to be barred
from recovering because of the rigid application of the doctrine
of in pari delicto. The prevention of unjust enrichment called for
the exception to apply in Tarnate’s favor. Consequently, the
RTC and the CA properly adjudged Gonzalo liable to pay
Tarnate the equivalent amount of the 10% retention fee (i.e.,
₱233,526.13).
Gonzalo sought to justify his refusal to turn over the
₱233,526.13 to Tarnate by insisting that he (Gonzalo) had a
debt of ₱200,000.00 to Congressman Victor Dominguez; that
his payment of the 10% retention fee to Tarnate was
conditioned on Tarnate paying that debt to Congressman
Dominguez; and that he refused to give the 10% retention fee
to Tarnate because Tarnate did not pay to Congressman
Dominguez.23 His justification was unpersuasive, however,
because, firstly, Gonzalo presented no proof of the debt to
Congressman Dominguez; secondly, he did not competently
establish the agreement on the condition that supposedly
bound Tarnate to pay to Congressman Dominguez;24 and,
thirdly, burdening Tarnate with Gonzalo’s personal debt to
Congressman Dominguez to be paid first by Tarnate would
constitute another case of unjust enrichment.
The Court regards the grant of moral damages, attorney’s fees
and litigation expenses to Tarnate to be inappropriate. We
have ruled that no damages may be recovered under a void
contract, which, being nonexistent, produces no juridical tie
between the parties involved.25 It is notable, too, that the RTC
and the CA did not spell out the sufficient factual and legal
justifications for such damages to be granted.
Lastly, the letter and spirit of Article 22 of the Civil Code
command Gonzalo to make a full reparation or compensation
to Tarnate. The illegality of their contract should not be
allowed to deprive Tarnate from being fully compensated
through the imposition of legal interest. Towards that end,
interest of 6% per annum reckoned from September 13, 1999,
the time of the judicial demand by Tarnate, is imposed on the
amount of ₱233,526.13. Not to afford this relief will make a
travesty of the justice to which Tarnate was entitled for having
suffered too long from Gonzalo’s unjust enrichment.

WHEREFORE, we AFFIRM the decision promulgated on

February 18, 2003, but DELETE the awards of moral damages,
attorney’s fees and litigation expenses; IMPOSE legal interest
of 6% per annum on the principal oL₱233,526.13 reckoned
from September 13, 1999; and DIRECT the petitioner to pay the
costs of suit.

SO ORDERED.

BLISS DEVELOPMENT VS DIAZ

VELASCO JR., J.:

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

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

The CA may have made the erroneous conclusion that Diaz

acted in good faith, but because BDC equally acted in bad faith,
Art. 453 of the Civil Code commands that the rights of one and
the other shall be the same as though both had acted in good
faith. The CA made the correct observation then, when it said:

Under Article 448, the landowner is given the option, either to

appropriate the improvement as his own upon payment of the
proper amount of indemnity or to sell the land to the possessor
in good faith. Relatedly Article 546 provides that a builder in
good faith is entitled to full reimbursement for all the necessary
and useful expenses incurred. In this case, however, the option
of selling the land to the builder in good faith is no longer viable
in light of the ruling in the interpleader case. Hence, there is
only one thing left for [BDC] to do: indemnify Diaz for the
improvements introduced on the property.23

Nevertheless, because the law treats both parties as if they

acted in good faith, the CA committed reversible error in
awarding moral and exemplary damages, there being no basis
therefor. We find it proper to delete the award of P100,000.00
as moral damages, P50,000.00 as exemplary damages, and
P25,000.00 as attorney’s fees.

In sum, the CA correctly reversed the ruling of the RTC, and

ordered BDC to pay Diaz the amount he paid as amortizations,
as well as the value of the improvements that he introduced on
the subject property. However, because both parties acted in
bad faith, there is no basis for the award of moral and
exemplary damages, as well as attorney’s fees.

WHEREFORE, in view of the foregoing, the January 21, 2014

Decision of the Court of Appeals in CA-G.R. CV No. 99179 is
hereby MODIFIED to read as follows: (1) petitioner Bliss
Development Corporation/Home Guaranty Corporation is
ordered topay respondent Montano M. Diaz the amount of
P1,106,915.58 for the amortizations paid and the amount spent ACTS NOT CONSTITUTING CRIMINAL OFFENSE BUT
on improvements on the property; and (2) Domingo Tapay is SHALL PRODUCE A CAUSE OF ACTION FOR DAMAGES
ordered to pay respondent Montano M. Diaz the amount of
P600,000.00, the amount he paid for the transfer of rights. CASTRO VS PEOPLE
SO ORDERED. CORONA, J.:
This Petition for Review on Certiorari 1 emanated from the
complaint for grave oral defamation2 filed by Albert P. Tan
against petitioner Jerome Castrsto.
The facts follow.
On November 11, 2002, Reedley International School (RIS)
dismissed Tan's son, Justin Albert (then a Grade 12 student), for
violating the terms of his disciplinary probation.3 Upon Tan's
request, RIS reconsidered its decision but imposed "non-
appealable" conditions such as excluding Justin Albert from
participating in the graduation ceremonies.
Aggrieved, Tan filed a complaint in the Department of
Education (Dep-Ed) for violation of the Manual of Regulation of
Private Schools, Education Act of 1982 and Article 19 of the
Civil Code4 against RIS. He alleged that the dismissal of his son
was undertaken with malice, bad faith and evident
premeditation. After investigation, the Dep-Ed found that RIS'
code violation point system allowed the summary imposition of
unreasonable sanctions (which had no basis in fact and in law).
The system therefore violated due process. Hence, the Dep-Ed
nullified it.5
Meanwhile, on November 20, 2002, the Dep-Ed ordered RIS to
readmit Justin Albert without any condition.6 Thus, he was able
to graduate from RIS and participate in the commencement
ceremonies held on March 30, 2003.
After the graduation ceremonies, Tan met Bernice C. Ching, a
fellow parent at RIS. In the course of their conversation, Tan
intimated that he was contemplating a suit against the officers
of RIS in their personal capacities, including petitioner who was
the assistant headmaster.
Ching telephoned petitioner sometime the first week of April
and told him that Tan was planning to sue the officers of RIS in
their personal capacities. Before they hung up, petitioner told
Ching:
Okay, you too, take care and be careful talking to [Tan], that's
dangerous.
Ching then called Tan and informed him that petitioner said
"talking to him was dangerous."
Insulted, Tan filed a complaint for grave oral defamation in the
Office of the City Prosecutor of Mandaluyong City against
petitioner on August 21, 2003.
On November 3, 2003, petitioner was charged with grave oral
defamation in the Metropolitan Trial Court (MeTC) of
Mandaluyong City, Branch 607 under the following
Information:
That on or about the 13th day of March, 2003 in the City of
Mandaluyong, Philippines, a place within the jurisdiction of this
Honorable Court, the above-named [petitioner], with
deliberate intent of bringing ATTY. ALBERT P. TAN, into
discredit, dishonor, disrepute and contempt, did then and
there, willfully, unlawfully and feloniously speak and utter the
following words to Ms. Bernice C. Ching:
"OK, YOU TOO, YOU TAKE CARE AND BE CAREFUL TALKING
TO [TAN], THAT'S DANGEROUS."
and other words of similar import of a serious and insulting
nature.
CONTRARY TO LAW.
Petitioner pleaded not guilty during arraignment.
The prosecution essentially tried to establish that petitioner
depicted Tan as a "dangerous person." Ching testified that
petitioner warned her that talking to Tan was dangerous. Tan,
on the other hand, testified that petitioner's statement
shocked him as it portrayed him as "someone capable of
committing undesirable acts." He added that petitioner
probably took offense because of the complaint he filed against
RIS in the Dep-Ed.
For his defense, petitioner denied harboring ill-feelings against
Tan despite the latter's complaint against RIS in the Dep-Ed.
Although he admitted conversing with Ching (whom he
considered as a close acquaintance) on the telephone a few
days after RIS' 2003 commencement exercises, petitioner
asserted that he never said or insinuated that Tan or talking to
Tan was dangerous. On cross-examination, however, he did not
categorically deny the veracity of Ching's statement.
The MeTC found that Ching's statements in her affidavit and in
open court were consistent and that she did not have any
motive to fabricate a false statement. Petitioner, on the other
hand, harbored personal resentment, aversion and ill-will
against Tan since the Dep-Ed compelled RIS to readmit his son.
Thus, the MeTC was convinced that petitioner told Ching
talking to Tan was dangerous and that he uttered the
statement with the intention to insult Tan and tarnish his social
and professional reputation.
In a decision dated December 27, 2005, the MeTC found
petitioner guilty beyond reasonable doubt of grave oral
defamation:8
WHEREFORE, judgment is hereby rendered finding accused,
Jerome Castro GUILTY beyond reasonable doubt of the crime
of Grave Oral Defamation, sentencing him therefore, in
accordance to Article 358(1) of the Revised Penal Code and
applying the Indeterminate Sentence Law to suffer the penalty
of imprisonment of 1 month and 1 day of arresto mayor as
minimum to 4 months and 1 day of arresto mayor as maximum.
On appeal, the Regional Trial Court (RTC) affirmed the factual
findings of the MeTC. However, in view of the animosity
between the parties, it found petitioner guilty only of slight oral
defamation. But because Tan filed his complaint in the Office of
the City Prosecutor of Mandaluyong City only on August 21,
2003 (or almost five months from discovery), the RTC ruled that
prescription had already set in; it therefore acquitted petitioner
on that ground.9
On April 19, 2007, the Office of the Solicitor General (OSG) filed
a petition for certiorari in the Court of Appeals (CA) assailing
the decision of the RTC.10 It contended that the RTC acted
with grave abuse of discretion when it downgraded petitioner's
offense to slight oral defamation. The RTC allegedly
misappreciated the antecedents which provoked petitioner to
utter the allegedly defamatory statement against Tan.
The CA found that the RTC committed grave abuse of
discretion when it misapprehended the totality of the
circumstances and found petitioner guilty only of slight oral
defamation. Thus, the CA reinstated the MeTC decision.11
Petitioner moved for reconsideration but it was denied.12
Hence, this recourse.
Petitioner basically contends that the CA erred in taking
cognizance of the petition for certiorari inasmuch as the OSG
raised errors of judgment (i.e., that the RTC misappreciated the
evidence presented by the parties) but failed to prove that the
RTC committed grave abuse of discretion. Thus, double
jeopardy attached when the RTC acquitted him.
We grant the petition.
No person shall be twice put in jeopardy of punishment for the
same offense.13 This constitutional mandate is echoed in
Section 7 of Rule 117 of the Rules of Court which provides:
Section 7. Former conviction or acquittal; double jeopardy.
'When an accused has been convicted or acquitted or the case
against him dismissed or otherwise terminated without his
express consent by a court of competent jurisdiction, upon a
valid complaint or in information or other formal charge
sufficient in form and substance to sustain a conviction and
after the accused had pleaded to the charge, the conviction or
acquittal of the accused or the dismissal of the case shall be a
bar to another prosecution for the offense charged or for any
attempt to commit the same or frustration thereof, or for any
offense which necessarily includes or is necessarily included in
the offense charged in the former complaint or information.
At most, petitioner could have been liable for damages under
Article 26 of the Civil Code21 :
Article 26. Every person shall respect the dignity, personality,
privacy and peace of mind of his neighbors and other persons.
The following and similar acts, though they may not constitute
a criminal offense, shall produce a cause of action for damages,
prevention and other relief:

Under this provision, double jeopardy occurs upon (1) a valid (3) Intriguing to cause another to be alienated from his friends;
indictment (2) before a competent court (3) after arraignment
Petitioner is reminded that, as an educator, he is supposed to
(4) when a valid plea has been entered and (5) when the
be a role model for the youth. As such, he should always act
accused was acquitted or convicted or the case was dismissed
with justice, give everyone his due and observe honesty and
or otherwise terminated without the express consent of the
good faith.22
accused.14 Thus, an acquittal, whether ordered by the trial or
appellate court, is final and unappealable on the ground of WHEREFORE, the petition is hereby GRANTED. The August 29,
double jeopardy.15 2007 decision and December 5, 2007 resolution of the Court of
Appeals in CA-G.R. SP No. 98649 are REVERSED and SET
The only exception is when the trial court acted with grave
ASIDE. The November 20, 2006 decision of the Regional Trial
abuse of discretion or, as we held in Galman v.
Court of Mandaluyong City, Branch 212 is REINSTATED.
Sandiganbayan,16 when there was mistrial. In such instances,
Petitioner Jerome Castro is ACQUITTED of slight oral
the OSG can assail the said judgment in a petition for certiorari
defamation as defined and penalized in Article 358 of the
establishing that the State was deprived of a fair opportunity to
Revised Penal Code.
prosecute and prove its case.17
No pronouncement as to costs.
The rationale behind this exception is that a judgment rendered
by the trial court with grave abuse of discretion was issued SO ORDERED.
without jurisdiction. It is, for this reason, void. Consequently,
there is no double jeopardy.

In this case, the OSG merely assailed the RTC's finding on the
nature of petitioner's statement, that is, whether it constituted
grave or slight oral defamation. The OSG premised its
allegation of grave abuse of discretion on the RTC's
"erroneous" evaluation and assessment of the evidence
presented by the parties.ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

What the OSG therefore questioned were errors of judgment

(or those involving misappreciation of evidence or errors of
law). However, a court, in a petition for certiorari, cannot
review the public respondent's evaluation of the evidence and LIABILITY OF A PUBLIC SERVANT OR EMPLOYEE
factual findings.18 Errors of judgment cannot be raised in a
LEDESMA VS CA AND DELMO
Rule 65 petition as a writ of certiorari can only correct errors of
jurisdiction (or those involving the commission of grave abuse GUTIERREZ, JR., J.:
of discretion).19
This petition seeks to reverse the decision of the respondent
Because the OSG did not raise errors of jurisdiction, the CA Court of Appeals which afirmed the decision of the Court of
erred in taking cognizance of its petition and, worse, in First Instance of Iloilo, adjudging the petitioner, who was then
reviewing the factual findings of the RTC.20 We therefore the President of the West Visayas College liable for damages
reinstate the RTC decision so as not to offend the constitutional under Article 27 of the Civil Code of the Philippines for failure to
prohibition against double jeopardy. graduate a student with honors.
The facts are not disputed.
An organization named Student Leadership Club was formed
by some students of the West Visayas College. They elected
the late Violets Delmo as the treasurer. In that capacity, Delmo
extended loans from the funds of the club to some of the
students of the school. "the petitioner claims that the said act
of extending loans was against school rules and regulations.
Thus, the petitioner, as President of the School, sent a letter to
Delmo informing her that she was being dropped from the
membership of the club and that she would not be a candidate
for any award or citation from the school.
Delmo asked for a reconsideration of the decision but the
petitioner denied it. Delmo, thus, appealed to the Office of the
Director of the Bureau of Public Schools.
The Director after due investigation, rendered a decison on
April 13, 1966 which provided:
Records of the preliminary investigation conducted by one of
the legal officers of this Office disclosed the following: That
Violeta Delmo was the treasurer of the Student Leadership
Club, an exclusive student organization; that pursuant to
Article IX of the of the Constitution and By-Laws of the club, it
passed Resolution No. 2, authorizing the treasurer to disburse
funds of the Club to student for financial aid and other
humanitarian purposes; that in compliance with said resolution
and as treasurer of the Club, Violeta Delmo extended loans to
some officers and members of the Club upon proper application
duly approved by the majority of the members of the Executive
Board; and that upon receiving the report from Mr. Jesse
Dagoon, adviser of the funds of the Club, that Office conducted
an investigation on the matter and having been convinced of
the guilt of Violets Delmo and the other officers and members
of the Club, that Office rendered the order or decision in
question. In justifying that Office's order or decision, it is
contended that approval by that Office of the Constitution and
By-Laws of the Club is necessary for its effectivity and validity
and since it was never submitted to that Office, the Club had no
valid constitution and By-Laws and that as a consequence,
Resolution No. 2 which was passed based on the Constitution
and By-Laws- is without any force and effect and the treasurer,
Violeta Delmo, who extended loans to some officers and
members of the Club pursuant thereto are illegal (sic), hence,
she and the other students involved are deemed guilty of
misappropriating the funds of the Club. On the other hand,
Raclito Castaneda, Nestor Golez and Violeta Delmo, President,
Secretary and Treasurer of the Club, respectively, testified that
the Club had adopted its Constitution and By-Laws in a
meeting held last October 3, 1965, and that pursuant to Article I
of said Constitution and By-Laws, the majority of the members
of the Executive Board passed Resolution No. 2, which
resolution became the basis for the extension on of loans to
some officers and members of the Club, that the Club honestly
believed that its Constitution and By-Laws has been approved
by the superintendent because the adviser of the Club, Mr.
Jesse Dagoon, assured the President of the Club that he will
cause the approval of the Constitution and By-Laws by the
Superintendent; the officers of the Club have been inducted to
office on October 9,1965 by the Superintendent and that the
Club had been likewise allowed to cosponsor the Education
Week Celebration.
After a careful study of the records, this Office sustains the
action taken by the Superintendent in penalizing the adviser of
the Club as well as the officers and members thereof by
dropping them from membership therein. However, this Office
is convinced that Violets M. Delmo had acted in good faith, in
her capacity as Club Treasurer, in extending loans to the
officers and members of the Student partnership Club.
Resolution No. 2 authorizing the Club treasurer to discharge
finds to students in need of financial assistance and other
humanitarian purposes had been approved by the Club adviser,
Mr. Jesse Dagoon, with the notation that approval was given in
his capacity as adviser of the Club and extension of the
Superintendent's personality. Aside from misleading the
officers and members of the Club, Mr. Dagoon, had
unsatisfactorily explained why he failed to give the Constitution
and By-Laws of the Club to the Superintendent for approval
despite his assurance to the Club president that he would do so.
With this finding of negligence on the part of the Club adviser,
not to mention laxity in the performance of his duties as such,
this Office considers as too severe and unwarranted that
portion of the questioned order stating that Violeta Delmo
"shall not be a candidate for any award or citation from this
school or any organization in this school." Violeta Delmo, it is
noted, has been a consistent full scholar of the school and she
alone has maintained her scholarship. The decision in question
would, therefore, set at naught all her sacrifice and frustrate
her dreams of graduating with honors in this year's
commencement exercises.
In view of all the foregoing, this Office believes and so holds
and hereby directs that appellant Violeta. M. Delmo, and for
that matter all other Club members or officers involved in this
case, be not deprived of any award, citation or honor from the
school, if they are otherwise entitled thereto. (Rollo, pp. 28-30)
On April 27, 1966, the petitioner received by mail the decision
of the Director and all the records of the case. On the same day,
petitioner received a telegram stating the following:
"AIRMAIL RECORDS DELMO CASE MISSENT THAT OFFICE"
The Director asked for the return only of the records but the
petitioner allegedly mistook the telegram as ordering him to
also send the decision back. On the same day, he returned by
mail all the records plus the decision of the Director to the
Bureau of Public Schools.
The next day, the petitioner received another telegram from
the Director order him to furnish Delmo with a copy of the
decision. The petitioner, in turn, sent a night letter to the
Director informing the latter that he had sent the decision back
and that he had not retained a copy thereof..
On May 3, 1966, the day of the graduation, the petitioner
received another telegram from the Director ordering him not
to deprive Delmo of any honors due her. As it was impossible
by this time to include Delmo's name in the program as one of
the honor students, the petitioner let her graduate as a plain
student instead of being awarded the Latin honor of Magna
Cum Laude.
To delay the matter further, the petitioner on May 5, 1966,
wrote the Director for a reconsideration of the latters" decision
because he believed that Delmo should not be allowed to
graduate with honors. The Director denied the petitioner's
request.
On July 12, 1966, the petitioner finally instructed the Registrar
of the school to enter into the scholastic records of Delmo the
honor, "Magna Cum Laude."
On July 30, 1966, Delmo, then a minor, was joined by her
parents in flag action for damages against the petitioner.
During the pendency of the action, however, Delmo passed
away, and thus, an Amended and Supplemental Complaint was
filed by her parents as her sole and only heirs.
The trial court after hearing rendered judgment against the
petitioner and in favor of the spouses Delmo. The court said:
Let us go to specific badges of the defendants (now petitioners)
bad faith. Per investigation of Violeta Delmo's appeal to
Director Vitaliano Bernardino of the Bureau of Public Schools
(Exhibit L it was the defendant who inducted the officers of the
Student Leadership Club on October 9, 1965. In fact the Club
was allowed to cosponsor the Education Week Celebration.
(Exh. "L"). If the defendant he not approve of the constitution
and by-laws of the Club, why did he induct the officers into
office and allow the Club to sponsor the Education Week
Celebration"? It was through his own act that the students were
misled to do as they did. Coupled with the defendants tacit
recognition of the Club was the assurance of Mr. Jemm
Dagoon, Club Adviser, who made the students believe that he
was acting as an extension of Mr. Ledesma's personality.
(Exhibit "L").
Another badge of the defendan'ts want of good faith is the fact
that, although, he kaew as early as April 27,1966 that per on of r
Bernardino, Exhibit "L," he was directed to give honors to Miss
Delmo, he kept Id information to . He told the Court that he
knew that the letter of Director Bernardino directed him not to
deprive Miss Delmo the honors due her, but she (sic) says that
he has not finished reading the letter-decision, Exhibit "L," of
Director Bernardino 0, him to give honors to Miss Delmo. (Tsn,
Feb. 5, 1974, testimony of Mr. Ledesma, pp. .33-35). It could not
be true that he has not finished reading the letter-decision,
Exh. "L," because said letter consisted of only three pages, and
the portion which directed that Miss Delmo "be not deprived of
any award, citation or honor from the school, if otherwise
entitled thereto is found at the last paragraph of the same.
How did he know the last paragraph if he did not read the
letter.
Defendants actuations regarding Miss Delmo's cam had been
one of bias and prejudice. When his action would favor him, he
was deliberate and aspect to the utter prejudice and detriment
of Miss Delmo. Thus, although, as early as April 27, 1966, he
knew of the exoneration of Miss Delino by Director Bernardino,
he withheld the information from Miss Delmo. This is
eloquently dramatized by Exh. "11" and Exh. "13" On April
29,1966, Director Bernardino cabled him to furnish Violeta
Delmo copy of the Decision, Exh. "L," but instead of informing
Miss Delmo about the decision, since he said he mailed back
the decision on April 28,1966, he sent a night letter on April
29,1966, to Director Bernardino, informing the latter that he
had returned the decision (Exh. "l3"), together with the record.
Why a night letter when the matter was of utmost urgency to
the parties in the case, because graduation day was only four
days ahead? An examination of the telegrams sent by the
defendant shows that he had been sending ordinary telegram
and not night letters. (Exh. "5", Exhibit "7"). At least, if the
defendant could not furnish a copy of the decision, (Exh. "L"),
to Miss Delmo, he should have told her about it or that Miss
Delmo's honors and citation in the commencement be
announced or indicated. But Mr. Ledesma is one who cannot
admit a mistake. Very ungentlemanly this is home out by his
own testimony despite his knowledge that his decision to
deprive Miss Delmo of honors due to her was overturned by
Director Bernardino, he on his wrong belief. To quote the
defendant,1 believed that she did not deserve those honors(Tsn
Feb. 5, 1974, p. 43,Empasized supplied). Despite the telegram
of Director Bernardino which the defendant received hours
before the commencement executory on May 3-4,1966, he did
not obey Director Bernardino because he said in his testimony
that he would be embarrassment . Tan Feb 5,1974, P. 46).
Evidently, he knew only his embarrassment and not that of r
Bernardino whose order was being flagrantly and wantonly
disregarded by bim And certainly, not the least of Miss Delmo's
embarrassment. His acts speak eloquently of ho bad faith and
unjust of mindwarped by his delicate sensitivity for having been
challenged by Miss Delmo, a mere student.
Finally the defendant's behaviour relative to Miss s case smacks
of contemptuous arrogance, oppression and abuse of power.
Come to think of it. He refused to obey the directive of Be o and
instead, chose to feign ignorance of it." (Reward on Appeal, p.
72-76).
The trial court awarded P20,000.00 to the estate of Violeta
Delmo and P10,000.00 to her parents for moral damages;
P5,000.00 for nominal damages to Violeta's estate; exemplary
damages of P10,000.00 and P2,000.00 attorney's fees.
On appeal, the Court of Appeals affirmed the decision. Hence,
this petition.
The issues raised in this petition can be reduced to the sole
question of whether or not the respondent Court of Appeals
erred in affirming the trial court's finding that petitioner is liable
for damages under Article 27 of the New Civil Code.
We find no reason why the findings of the trial and appellate
courts should be reversed. It cannot be disputed that Violeta
Delmo went through a painful ordeal which was brought about
by the petitioner's neglect of duty and callousness. Thus, moral
damages are but proper. As we have affirmed in the case of
(Prudenciado v. Alliance Transport System, Inc., 148 SCRA 440,
448):
There is no argument that moral damages include physical
suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation,
and similar injury. Though incapable of pecuniary computation,
moral damages may be recovered if they are the proximate
result of defendant's wrongly act or omission." (People v.
Baylon, 129 SCRA 62 (1984).
The Solicitor-General tries to cover-up the petitioner's
deliberate omission to inform Miss Delmo by stating that it was
not the duty of the petitioner to furnish her a copy of the
Director's decision. Granting this to be true, it was nevertheless
the petitioner's duty to enforce the said decision. He could have
done so considering that he received the decision on April 27,
1966 and even though he sent it back with the records of the
case, he undoubtedly read the whole of it which consisted of
only three pages. Moreover, the petitioner should have had the
decency to meet with Mr. Delmo, the girl's father, and inform
the latter, at the very least of the decision. This, the petitioner
likewise failed to do, and not without the attendant bad faith
which the appellate court correctly pointed out in its decision,
to wit:
Third, assuming that defendant could not furnish Miss Delmo
of a copy of the decision, he could have used his discretion and
plain common sense by informing her about it or he could have
directed the inclusion of Miss Delmo's honor in the printed
commencement program or announced it during the
commencement exercises.
Fourth, defendant despite receipt of the telegram of Director
Benardino hours before the commencement exercises on May
3-4, 1966, disobeyed his superior by refusing to give the honors
due Miss Delmo with a lame excuse that he would be
embarrassed if he did so, to the prejudice of and in complete
disregard of Miss Delmo's rights.
Fifth, defendant did not even extend the courtesy of meeting
Mr. Pacifico Delmo, father of Miss Delmo, who tried several
times to see defendant in his office thus Mr. Delmo suffered
extreme disappointment and humiliation.
Defendant, being a public officer should have acted with
circumspection and due regard to the rights of Miss Delmo.
Inasmuch as he exceeded the scope of his authority by
defiantly disobeying the lawful directive of his superior,
Director Bernardino, defendant is liable for damages in his
personal capacity. . . . (Rollo, pp- 57-58)
Based on the undisputed facts, exemplary damages are also in
order. In the same case of Prudenciado v. Alliance Transport
System, Inc., supra., at p. 450, we ruled:
The rationale behind exemplary or corrective damages is, as
the name implies, to provide an example or correction for the
public good (Lopez, et al. v. Pan American World Airways, 16
SCRA 431).
However, we do not deem it appropriate to award the spouses
Delmo damages in the amount of P10,000.00 in their individual
capacity, separately from and in addition to what they are
already entitled to as sole heirs of the deceased Violeta Delmo.
Thus, the decision is modified insofar as moral damages are
awarded to the spouses in their own behalf.

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

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

SO ORDERED.

CAMPUGAN VS TOLENTINO JR.

BERSAMIN, J.:

In this consolidated administrative case, complainants Jessie T.

Campugan and Robert C. Torres seek the disbarment of
respondents Atty. Federico S. Tolentino, Jr., Atty. Daniel F.
Victorio, Jr., Atty. Renato G. Cunanan, Atty. Elbert T. Quilala
and Atty. Constante P. Caluya, Jr. for allegedly falsifying a court
order that became the basis for the cancellation of their
annotation of the notice ofadverse claim and the notice of lis
pendens in the Registry of Deeds in Quezon City.
Antecedents
Atty. Victorio, Jr. had replaced Atty. Edgardo Abad as counsel
of the complainants in a civil action they brought to seek the
annulment of Transfer Certificate of Title (TCT) No. N-290546
of the Registry of Deeds of Quezon City in the first week of
January 2007 in the Regional Trial Court (RTC) in Quezon City
(Civil Case No. Q-07-59598). They impleaded as defendants
Ramon and Josefina Ricafort, Juliet Vargas and the Register of
Deeds of Quezon City. They caused to be annotated on TCT
No. N-290546 their affidavit of adverse claim, as well as the
notice of lis pendens.1 Atty. Tolentino, Jr. was the counsel of
defendant Ramon and Josefina Ricafort.
In their sworn complaint for disbarment dated April 23, 2009
(later docketed as A.C. No. 8261),2 the complainants narrated
that as the surviving children of the late Spouses Antonio and
Nemesia Torres, they inherited upon the deaths of their
parents a residential lot located at No. 251 Boni Serrano Street,
Murphy, Cubao, Quezon City registered under Transfer
Certificate of Title (TCT) No. RT-64333(35652) of the Register of
Deeds of Quezon City;3 that on August 24, 2006, they
discovered that TCT No. RT-64333(35652) had been unlawfully
cancelled and replaced by TCT No. N-290546 of the Register of
Deeds of Quezon City under the names of Ramon and Josefina
Ricafort;4 and that, accordingly, they immediately caused the
annotation of their affidavit of adverse claim on TCT No. N-
290546.
It appears that the parties entered into an amicable settlement
during the pendency of Civil Case No. Q-07-59598 in order to
end their dispute,5 whereby the complainants agreed to sell
the property and the proceeds thereof would be equally divided
between the parties, and the complaint and counterclaim
would be withdrawn respectively by the complainants (as the
plaintiffs) and the defendants. Pursuant to the terms of the
amicable settlement, Atty. Victorio, Jr. filed a Motion to
Withdraw Complaint dated February 26, 2008,6 which the RTC
granted in its order dated May 16, 2008 upon noting the
defendants’ lack of objection thereto and the defendants’
willingness to similarly withdraw their counterclaim.7
The complainants alleged that from the time of the issuance by
the RTC of the order dated May 16, 2008, they could no longer
locate or contact Atty. Victorio, Jr. despite making several
phone calls and visits to his office; that they found out upon
verification at the Register of Deeds of Quezon City that new
annotations were made on TCT No. N-290546, specifically: (1)
the annotation of the letter-request appearing to be filed by
Atty. Tolentino, Jr.8 seeking the cancellation of the affidavit of
adverse claim and the notice of lis pendens annotated on TCT
No. N-290546; and (2) the annotation of the decision dated
May 16, 2008 rendered in Civil Case No. Q-07-59598 by the
RTC, Branch 95, in Quezon City, granting the complainants’
Motion to Withdraw Complaint;9 and that a copy of the letter
request dated June 30, 2008 addressed to Atty. Quilala,
Registrar of Deeds of Quezon City, disclosed that it was
defendant Ramon Ricafort who had signed the letter.
Feeling aggrieved by their discovery, the complainants filed an
appeal en consulta with the Land Registration Authority (LRA),
docketed as Consulta No. 4707, assailing the unlawful
cancellation of their notice of adverse claim and their notice of
lis pendens under primary entries PE-2742 and PE-3828-9,
respectively. The LRA set Consulta No. 4707 for hearing on
March 30, 2009, and directed the parties to submit their
respective memoranda and/or supporting documents on or
beforesuch scheduled hearing.10 However, the records do not
disclose whether Consulta No. 4707 was already resolved, or
remained pending at the LRA.
Unable to receive any response or assistance from Atty.
Victorio, Jr. despite their having paid him for his professional
services, the complainants felt that said counsel had
abandoned their case. They submitted that the cancellation of
their notice of adverse claim and their notice of lis pendens
without a court order specifically allowing such cancellation
resulted from the connivance and conspiracy between Atty.
Victorio, Jr. and Atty. Tolentino, Jr., and from the taking
advantage of their positions as officials in the Registry of Deeds
by respondents Atty. Quilala, the Chief Registrar, and Atty.
Cunanan, the acting Registrar and signatory of the new
annotations. Thus, they claimed to be thereby prejudiced.
On July 6, 2009, the Court required the respondents to
comment on the verified complaint.11 Atty. Victorio, Jr.
asserted in his Comment dated August 17, 200912 that
complainant Robert Torres had been actively involved in the
proceedings in Civil Case No. Q-07-59598, which included the
mediation process; that the complainants, after having
aggressively participated in the drafting of the amicable
settlement, could not now claim that they had been deceived
into entering the agreement in the same way that they could
not feign ignorance of the conditions contained therein; that he
did not commit any abandonment as alleged, but had
performed in good faith his duties as the counsel for the
complainants in Civil Case No. Q-07-59598; that he should not
be held responsible for their representation in other
proceedings, such as that before the LRA, which required a
separate engagement; and that the only payment he had
received from the complainants were those for his appearance
fees of ₱1,000.00 for every hearing in the RTC.
In his Comment dated August 24, 2009,13 Atty. Tolentino, Jr.
refuted the charge of conspiracy, stressing that he was not
acquainted with the other respondents, except Atty. Victorio,
Jr. whom he had met during the hearings in Civil Case No. Q-
07-59598; that although he had notarized the letter request
dated June 30, 2008 of Ramon Ricafort to the Register of
Deeds, he had no knowledge about how said letter-request had
been disposed of by the Register of Deeds; and that the present
complaint was the second disbarment case filed by the
complainants against him with no other motive except to
harass and intimidate him.
Atty. Quilala stated in his Comment dated September 1,
200914 that it was Atty. Caluya, Jr., another Deputy Register of
Deeds, who was the actual signing authority of the annotations
that resulted in the cancellation of the affidavit of adverse claim
and the notice of lis pendens on TCT No. N-290546; that the
cancellation of the annotations was undertaken in the regular
course of official duty and in the exercise of the ministerial duty
of the Register of Deeds; that no irregularity occurred or was
performed in the cancellation of the annotations; and that the
Register of Deeds was impleaded in Civil Case No. Q-07-59598
only as a nominal party, thereby discounting any involvement
in the proceedings in the case.
Atty. Cunanan did not file any comment.15
As the result of Atty. Quilala’s allegation in his Comment in A.C.
No. 8261 that it had been Atty. Caluya, Jr.’s signature that
appeared below the cancelled entries, the complainants filed
another sworn disbarment complaint dated August 26, 2010
alleging that Atty. Caluya, Jr. had forged the signature of Atty.
Cunanan.16 This disbarment complaint was docketed as A.C.
No. 8725, and was later on consolidated with A.C. No. 826117
because the complaints involved the same parties and rested
on similar allegations against the respondents.
Atty. Quilala filed his Comment in A.C. No. 8725 to belie the
allegation of forgery and to reiterate the arguments he had
made in A.C. No. 8261.18 On his part, Atty. Caluya, Jr.
manifested that he adopted Atty. Quilala’s Comment.19
Ruling
We dismiss the complaints for disbarment for being bereft of
merit.
Well entrenched in this jurisdiction is the rule that a lawyer may
be disciplined for misconduct committed either in his
professional or private capacity. The test is whether his conduct
shows him to be wanting in moral character, honesty, probity,
and good demeanor, or whether his conduct renders him
unworthy to continue as an officer of the Court.20 Verily,
Canon 7 of the Code of Professional Responsibility mandates all
lawyers to uphold at all times the dignity and integrity of the
Legal Profession. Lawyers are similarly required under Rule
1.01, Canon 1 of the same Code not to engage in any unlawful,
dishonest and immoral or deceitful conduct. Failure to observe
these tenets of the Code of Professional Responsibility exposes
the lawyer to disciplinary sanctions as provided in Section 27,
Rule 138 of the Rules of Court, as amended, viz.:
Section 27. Disbarment or suspension of attorneys by Supreme
Court, grounds therefor. — A member of the bar may be
disbarred or suspended from his office as attorney by the
Supreme Court for any deceit, malpractice, or other gross
misconduct in such office, grossly immoral conduct, or by
reason of his conviction of a crime involving moral turpitude, or
for any violation of the oath which he is required to take before
the admission to practice, or for a wilful disobedience
appearing as an attorney for a party to a case without authority
so to do. The practice of soliciting cases at law for the purpose
of gain, either personally or through paid agents or brokers,
constitutes malpractice.
The complainants’ allegations of the respondents’ acts and
omissions are insufficient to establish any censurable conduct
against them.
Section 10 of Presidential Decree No. 1529 (Property
Registration Decree) enumerates the general duties of the
Register of Deeds, as follows:
Section 10. General functions of Registers of Deeds. – x x x
It shall be the duty of the Register of Deeds to immediately
register an instrument presented for registration dealing with
real or personal property which complies with all the requisites
for registration. He shall see to it that said instrument bears the
proper documentary science stamps and that the same are
properly canceled. If the instrument is not registrable, he shall
forthwith deny registration thereof and inform the present or
of such denial in writing, stating the ground or reason therefor,
and advising him of his right to appeal by consulta in
accordance with Section 117 of this Decree. (Emphasis
supplied)
The aforementioned duty of the Register of Deeds is ministerial
in nature.21 A purely ministerial act or duty is one that an
officer or tribunal performs in a given state of facts, in a
prescribed manner, in obedience to the mandate of a legal
authority, without regard to or the exercise of his own
judgment upon the propriety or impropriety of the act done. If
the law imposes a duty upon a public officer and gives him the
right to decide how or when the duty shall be performed, such
duty is discretionary, not ministerial. The duty is ministerial
only when its discharge requires neither the exercise of official
discretion nor the exercise of judgment.22
In Gabriel v. Register of Deeds of Rizal,23 the Court
underscores that registration is a merely ministerial act of the
Register of Deeds, explaining:
x x x [W]hether the document is invalid, frivolous or intended to
harass, is not the duty of a Register of Deeds to decide, but a
court of competent jurisdiction, and that it is his concern to see
whether the documents sought to be registered conform with
the formal and legal requirements for such documents.
In view of the foregoing, we find no abuse of authority or
irregularity committed by Atty. Quilala, Atty. Cunanan, and
Atty. Caluya, Jr. with respect to the cancellation of the notice of
adverse claim and the notice of lis pendens annotated on TCT
No. N-290546. Whether or not the RTC order dated May 16,
2008 or the letter-request dated June 30,2008 had been
falsified, fraudulent or invalid was not for them to determine
inasmuch as their duty to examine documents presented for
registration was limited only to what appears on the face of the
documents. If, upon their evaluation of the letter-request and
the RTC order, they found the same to be sufficient in law and
to be in conformity with existing requirements, it became
obligatory for them to perform their ministerial duty without
unnecessary delay.24
Should they be aggrieved by said respondents’ performance of
duty, the complainants were not bereft of any remedy because
they could challenge the performance of duty by bringing the
matter by way of consulta with the LRA, as provided by Section
11725 of Presidential Decree No. 1529. But, as enunciated in
Gabriel v. Register of Deeds of Rizal,26 it was ultimately within
the province of a court of competent jurisdiction to resolve
issues concerning the validity or invalidity of a document
registered by the Register of Deeds.
The complainants charge Atty. Victorio, Jr. and Atty. Tolentino,
Jr. with having conspired with each other to guarantee that the
parties in Civil Case No. Q-59598 would enter into the amicable
settlement, and then to cause the cancellation of the affidavit
of adverse claim and notice of lis pendens annotated on TCT
No. N-290546. The complainants further fault Atty. Victorio, Jr.
with having abandoned their cause since the issuance of the
RTC of its order dated May 16, 2008. The complainants’
charges are devoid of substance.
Although it is not necessary to prove a formal agreement in
order to establish conspiracy because conspiracy may be
inferred from the circumstances attending the commission of
an act, it is nonetheless essential that conspiracy be established
by clear and convincing evidence.27 The complainants failed in
this regard. Outside of their bare assertions that Atty. Victorio,
Jr. and Atty. Tolentino, Jr. had conspired with each other in
order to cause the dismissal of the complaint and then
discharge of the annotations, they presented no evidence to
support their allegation of conspiracy. On the contrary, the
records indicated their own active participation in arriving at
the amicable settlement with the defendants in Civil Case No.
Q-07-59598. Hence, they could not now turn their backs on the
amicable settlement that they had themselves entered into.
Even assuming that Atty. Victorio, Jr. and Atty. Tolentino, Jr.
initiated and participated in the settlement of the case, there
was nothing wrong in their doing so. It was actually their
obligation as lawyers to do so, pursuant to Rule 1.04, Canon 1
of the Code of Professional Responsibility, viz.:
RULE 1.04 – A lawyer shall encourage his clients to avoid, end
or settle a controversy if it will admit of a fair
settlement.1âwphi1
In fine, the presumption of the validity of the amicable
settlement of the complainants and the defendants in Civil
Case No. Q-07-59598 subsisted.28
Anent the complainants’ charge of abandonment against Atty.
Victorio, Jr., Rule 18.03 and Rule 18.04, Canon 18 of the Code of
Professional Responsibility are applicable, to wit:
CANON 18 – A lawyer shall serve his client with competence
and diligence.
Rule 18.03 – A lawyer shall not neglecta legal matter entrusted
to him, and his negligence in connection therewith shall render
him liable.
Rule 18.04 – A lawyer shall keep the client informed of the
status of his case and shall respond within a reasonable time to
the client’s request for information.
There is no issue that the complainants engaged the services of
Atty. Victorio, Jr. as their counsel in Civil Case No. Q-07-59598.
Atty. Victorio, Jr. served as such counsel. With Atty. Victorio, Jr.
assistance, the complainants obtained a fair settlement
consisting in receiving half of the proceeds of the sale of the
property in litis, without any portion of the proceeds accruing
to counsel as his legal fees. The complainants did not
competently and persuasively show any unfaithfulness on the
part of Atty. Victorio, Jr. as far as their interest in the litigation
was concerned. Hence, Atty. Victorio, Jr. was not liable for
abandonment.

Atty. Victorio, Jr. could not be faulted for the perceived

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

WHEREFORE, the Court DISMISSES the baseless disbarment

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

SO ORDERED. CIVIL LIABILITY ARISING FROM A CRIMINAL OFFENSE

PEOPLE VS BAYOTAS

ROMERO, J.:

In Criminal Case No. C-3217 filed before Branch 16, RTC Roxas
City, Rogelio Bayotas y Cordova was charged with Rape and
eventually convicted thereof on June 19, 1991 in a decision
penned by Judge Manuel E. Autajay. Pending appeal of his
conviction, Bayotas died on February 4, 1992 at

the National Bilibid Hospital due to cardio respiratory arrest

secondary to hepatic encephalopathy secondary to hipato
carcinoma gastric malingering. Consequently, the Supreme
Court in its Resolution of May 20, 1992 dismissed the criminal
aspect of the appeal. However, it required the Solicitor General
to file its comment with regard to Bayotas' civil liability arising
from his commission of the offense charged.
In his comment, the Solicitor General expressed his view that
the death of accused-appellant did not extinguish his civil
liability as a result of his commission of the offense charged.
The Solicitor General, relying on the case of People v.
Sendaydiego 1 insists that the appeal should still be resolved
for the purpose of reviewing his conviction by the lower court
on which the civil liability is based.
Counsel for the accused-appellant, on the other hand, opposed
the view of the Solicitor General arguing that the death of the
accused while judgment of conviction is pending appeal
extinguishes both his criminal and civil penalties. In support of
his position, said counsel invoked the ruling of the Court of
Appeals in People v. Castillo and Ocfemia 2 which held that the
civil obligation in a criminal case takes root in the criminal
liability and, therefore, civil liability is extinguished if accused
should die before final judgment is rendered.
We are thus confronted with a single issue: Does death of the
accused pending appeal of his conviction extinguish his civil
liability?
In the aforementioned case of People v. Castillo, this issue was
settled in the affirmative. This same issue posed therein was
phrased thus: Does the death of Alfredo Castillo affect both his
criminal responsibility and his civil liability as a consequence of
the alleged crime?
It resolved this issue thru the following disquisition:
Article 89 of the Revised Penal Code is the controlling statute.
It reads, in part:
Art. 89. How criminal liability is totally extinguished. —
Criminal liability is totally extinguished:
1. By the death of the convict, as to the personal penalties; and
as to the pecuniary penalties liability therefor is extinguished
only when the death of the offender occurs before final
judgment;
With reference to Castillo's criminal liability, there is no
question. The law is plain. Statutory construction is
unnecessary. Said liability is extinguished.
The civil liability, however, poses a problem. Such liability is
extinguished only when the death of the offender occurs before
final judgment. Saddled upon us is the task of ascertaining the
legal import of the term "final judgment." Is it final judgment as
contradistinguished from an interlocutory order? Or, is it a
judgment which is final and executory?
We go to the genesis of the law. The legal precept contained in
Article 89 of the Revised Penal Code heretofore transcribed is
lifted from Article 132 of the Spanish El Codigo Penal de 1870
which, in part, recites:
La responsabilidad penal se extingue.
1. Por la muerte del reo en cuanto a las penas personales
siempre, y respecto a las pecuniarias, solo cuando a su
fallecimiento no hubiere recaido sentencia firme.
The code of 1870 . . . it will be observed employs the term
"sentencia firme." What is "sentencia firme" under the old
statute?
XXVIII Enciclopedia Juridica Española, p. 473, furnishes the
ready answer: It says:
SENTENCIA FIRME. La sentencia que adquiere la fuerza de las
definitivas por no haberse utilizado por las partes litigantes
recurso alguno contra ella dentro de los terminos y plazos
legales concedidos al efecto.
"Sentencia firme" really should be understood as one which is
definite. Because, it is only when judgment is such that, as
Medina y Maranon puts it, the crime is confirmed — "en
condena determinada;" or, in the words of Groizard, the guilt of
the accused becomes — "una verdad legal." Prior thereto,
should the accused die, according to Viada, "no hay
legalmente, en tal caso, ni reo, ni delito, ni responsabilidad
criminal de ninguna clase." And, as Judge Kapunan well
explained, when a defendant dies before judgment becomes
executory, "there cannot be any determination by final
judgment whether or not the felony upon which the civil action
might arise exists," for the simple reason that "there is no party
defendant." (I Kapunan, Revised Penal Code, Annotated, p.
421. Senator Francisco holds the same view. Francisco, Revised
Penal Code, Book One, 2nd ed., pp. 859-860)
The legal import of the term "final judgment" is similarly
reflected in the Revised Penal Code. Articles 72 and 78 of that
legal body mention the term "final judgment" in the sense that
it is already enforceable. This also brings to mind Section 7,
Rule 116 of the Rules of Court which states that a judgment in a
criminal case becomes final "after the lapse of the period for
perfecting an appeal or when the sentence has been partially or
totally satisfied or served, or the defendant has expressly
waived in writing his right to appeal."
By fair intendment, the legal precepts and opinions here
collected funnel down to one positive conclusion: The term
final judgment employed in the Revised Penal Code means
judgment beyond recall. Really, as long as a judgment has not
become executory, it cannot be truthfully said that defendant is
definitely guilty of the felony charged against him.
Not that the meaning thus given to final judgment is without
reason. For where, as in this case, the right to institute a
separate civil action is not reserved, the decision to be rendered
must, of necessity, cover "both the criminal and the civil
aspects of the case." People vs. Yusico (November 9, 1942), 2
O.G., No. 100, p. 964. See also: People vs. Moll, 68 Phil., 626,
634; Francisco, Criminal Procedure, 1958 ed., Vol. I, pp. 234,
236. Correctly, Judge Kapunan observed that as "the civil action
is based solely on the felony committed and of which the
offender might be found guilty, the death of the offender
extinguishes the civil liability." I Kapunan, Revised Penal Code,
Annotated, supra.
Here is the situation obtaining in the present case: Castillo's
criminal liability is out. His civil liability is sought to be enforced
by reason of that criminal liability. But then, if we dismiss, as
we must, the criminal action and let the civil aspect remain, we
will be faced with the anomalous situation whereby we will be
called upon to clamp civil liability in a case where the source
thereof — criminal liability — does not exist. And, as was well
stated in Bautista, et al. vs. Estrella, et al., CA-G.R.
No. 19226-R, September 1, 1958, "no party can be found and
held criminally liable in a civil suit," which solely would remain if
we are to divorce it from the criminal proceeding."
This ruling of the Court of Appeals in the Castillo case 3 was
adopted by the Supreme Court in the cases of People of the
Philippines v. Bonifacio Alison, et al., 4 People of the
Philippines v. Jaime Jose, et al. 5 and People of the Philippines
v. Satorre 6 by dismissing the appeal in view of the death of the
accused pending appeal of said cases.
As held by then Supreme Court Justice Fernando in the Alison
case:
The death of accused-appellant Bonifacio Alison having been
established, and considering that there is as yet no final
judgment in view of the pendency of the appeal, the criminal
and civil liability of the said accused-appellant Alison was
extinguished by his death (Art. 89, Revised Penal Code; Reyes'
Criminal Law, 1971 Rev. Ed., p. 717, citing People v. Castillo and
Ofemia C.A., 56 O.G. 4045); consequently, the case against him
shouldbe dismissed.
On the other hand, this Court in the subsequent cases of
Buenaventura Belamala v. Marcelino Polinar 7 and Lamberto
Torrijos v. The Honorable Court of Appeals 8 ruled differently.
In the former, the issue decided by this court was: Whether the
civil liability of one accused of physical injuries who died before
final judgment is extinguished by his demise to the extent of
barring any claim therefore against his estate. It was the
contention of the administrator-appellant therein that the
death of the accused prior to final judgment extinguished all
criminal and civil liabilities resulting from the offense, in view of
Article 89, paragraph 1 of the Revised Penal Code. However,
this court ruled therein:
We see no merit in the plea that the civil liability has been
extinguished, in view of the provisions of the Civil Code of the
Philippines of 1950 (Rep. Act No. 386) that became operative
eighteen years after the revised Penal Code. As pointed out by
the Court below, Article 33 of the Civil Code establishes a civil
action for damages on account of physical injuries, entirely
separate and distinct from the criminal action.
Art. 33. In cases of defamation, fraud, and physical injuries, a
civil action for damages, entirely separate and distinct from the
criminal action, may be brought by the injured party. Such civil
action shall proceed independently of the criminal prosecution,
and shall require only a preponderance of evidence.
Assuming that for lack of express reservation, Belamala's civil
action for damages was to be considered instituted together
with the criminal action still, since both proceedings were
terminated without final adjudication, the civil action of the
offended party under Article 33 may yet be enforced
separately.
In Torrijos, the Supreme Court held that:
It should be stressed that the extinction of civil liability follows
the extinction of the criminal liability under Article 89, only
when the civil liability arises from the criminal act as its only
basis. Stated differently, where the civil liability does not exist
independently of the criminal responsibility, the extinction of
the latter by death, ipso facto extinguishes the former,
provided, of course, that death supervenes before final
judgment. The said principle does not apply in instant case
wherein the civil liability springs neither solely nor originally
from the crime itself but from a civil contract of purchase and
sale. (Emphasis ours)
In the above case, the court was convinced that the civil liability
of the accused who was charged with estafa could likewise
trace its genesis to Articles 19, 20 and 21 of the Civil Code since
said accused had swindled the first and second vendees of the
property subject matter of the contract of sale. It therefore
concluded: "Consequently, while the death of the accused
herein extinguished his criminal liability including fine, his civil
liability based on the laws of human relations remains."
Thus it allowed the appeal to proceed with respect to the civil
liability of the accused, notwithstanding the extinction of his
criminal liability due to his death pending appeal of his
conviction.
To further justify its decision to allow the civil liability to
survive, the court relied on the following ratiocination: Since
Section 21, Rule 3 of the Rules of Court 9 requires the dismissal
of all money claims against the defendant whose death
occurred prior to the final judgment of the Court of First
Instance (CFI), then it can be inferred that actions for recovery
of money may continue to be heard on appeal, when the death
of the defendant supervenes after the CFI had rendered its
judgment. In such case, explained this tribunal, "the name of
the offended party shall be included in the title of the case as
plaintiff-appellee and the legal representative or the heirs of
the deceased-accused should be substituted as defendants-
appellants."
It is, thus, evident that as jurisprudence evolved from Castillo to
Torrijos, the rule established was that the survival of the civil
liability depends on whether the same can be predicated on
sources of obligations other than delict. Stated differently, the
claim for civil liability is also extinguished together with the
criminal action if it were solely based thereon, i.e., civil liability
ex delicto.
However, the Supreme Court in People v. Sendaydiego, et al.
10 departed from this long-established principle of law. In this
case, accused Sendaydiego was charged with and convicted by
the lower court of malversation thru falsification of public
documents. Sendaydiego's death supervened during the
pendency of the appeal of his conviction.
This court in an unprecedented move resolved to dismiss
Sendaydiego's appeal but only to the extent of his criminal
liability. His civil liability was allowed to survive although it was
clear that such claim thereon was exclusively dependent on the
criminal action already extinguished. The legal import of such
decision was for the court to continue exercising appellate
jurisdiction over the entire appeal, passing upon the
correctness of Sendaydiego's conviction despite dismissal of
the criminal action, for the purpose of determining if he is civilly
liable. In doing so, this Court issued a Resolution of July 8, 1977
stating thus:
The claim of complainant Province of Pangasinan for the civil
liability survived Sendaydiego because his death occurred after
final judgment was rendered by the Court of First Instance of
Pangasinan, which convicted him of three complex crimes of
malversation through falsification and ordered him to
indemnify the Province in the total sum of P61,048.23 (should
be P57,048.23).
The civil action for the civil liability is deemed impliedly
instituted with the criminal action in the absence of express
waiver or its reservation in a separate action (Sec. 1, Rule 111 of
the Rules of Court). The civil action for the civil liability is
separate and distinct from the criminal action (People and
Manuel vs. Coloma, 105 Phil. 1287; Roa vs. De la Cruz, 107 Phil.
8).
When the action is for the recovery of money and the
defendant dies before final judgment in the Court of First
Instance, it shall be dismissed to be prosecuted in the manner
especially provided in Rule 87 of the Rules of Court (Sec. 21,
Rule 3 of the Rules of Court).
The implication is that, if the defendant dies after a money
judgment had been rendered against him by the Court of First
Instance, the action survives him. It may be continued on
appeal (Torrijos vs. Court of Appeals, L-40336, October 24,
1975; 67 SCRA 394).
The accountable public officer may still be civilly liable for the
funds improperly disbursed although he has no criminal liability
(U.S. vs. Elvina, 24 Phil. 230; Philippine National Bank vs.
Tugab, 66 Phil. 583).
In view of the foregoing, notwithstanding the dismissal of the
appeal of the deceased Sendaydiego insofar as his criminal
liability is concerned, the Court Resolved to continue exercising
appellate jurisdiction over his possible civil liability for the
money claims of the Province of Pangasinan arising from the
alleged criminal acts complained of, as if no criminal case had
been instituted against him, thus making applicable, in
determining his civil liability, Article 30 of the Civil Code . . .
and, for that purpose, his counsel is directed to inform this
Court within ten (10) days of the names and addresses of the
decedent's heirs or whether or not his estate is under
administration and has a duly appointed judicial administrator.
Said heirs or administrator will be substituted for the deceased
insofar as the civil action for the civil liability is concerned (Secs.
16 and 17, Rule 3, Rules of Court).
Succeeding cases 11 raising the identical issue have maintained
adherence to our ruling in Sendaydiego; in other words, they
were a reaffirmance of our abandonment of the settled rule
that a civil liability solely anchored on the criminal (civil liability
ex delicto) is extinguished upon dismissal of the entire appeal
due to the demise of the accused.
But was it judicious to have abandoned this old ruling? A re-
examination of our decision in Sendaydiego impels us to revert
to the old ruling.
To restate our resolution of July 8, 1977 in Sendaydiego: The
resolution of the civil action impliedly instituted in the criminal
action can proceed irrespective of the latter's extinction due to
death of the accused pending appeal of his conviction, pursuant
to Article 30 of the Civil Code and Section 21, Rule 3 of the
Revised Rules of Court.
Article 30 of the Civil Code provides:
When a separate civil action is brought to demand civil liability
arising from a criminal offense, and no criminal proceedings are
instituted during the pendency of the civil case, a
preponderance of evidence shall likewise be sufficient to prove
the act complained of.
Clearly, the text of Article 30 could not possibly lend support to
the ruling in Sendaydiego. Nowhere in its text is there a grant
of authority to continue exercising appellate jurisdiction over
the accused's civil liability ex delicto when his death supervenes
during appeal. What Article 30 recognizes is an alternative and
separate civil action which may be brought to demand civil
liability arising from a criminal offense independently of any
criminal action. In the event that no criminal proceedings are
instituted during the pendency of said civil case, the quantum
of evidence needed to prove the criminal act will have to be
that which is compatible with civil liability and that is,
preponderance of evidence and not proof of guilt beyond
reasonable doubt. Citing or invoking Article 30 to justify the
survival of the civil action despite extinction of the criminal
would in effect merely beg the question of whether civil liability
ex delicto survives upon extinction of the criminal action due to
death of the accused during appeal of his conviction. This is
because whether asserted in the criminal action or in a separate
civil action, civil liability ex delicto is extinguished by the death
of the accused while his conviction is on appeal. Article 89 of
the Revised Penal Code is clear on this matter:
Art. 89. How criminal liability is totally extinguished. —
Criminal liability is totally extinguished:
1. By the death of the convict, as to the personal penalties; and
as to pecuniary penalties, liability therefor is extinguished only
when the death of the offender occurs before final judgment;
However, the ruling in Sendaydiego deviated from the
expressed intent of Article 89. It allowed claims for civil liability
ex delicto to survive by ipso facto treating the civil action
impliedly instituted with the criminal, as one filed under Article
30, as though no criminal proceedings had been filed but
merely a separate civil action. This had the effect of converting
such claims from one which is dependent on the outcome of
the criminal action to an entirely new and separate one, the
prosecution of which does not even necessitate the filing of
criminal proceedings. 12 One would be hard put to pinpoint the
statutory authority for such a transformation. It is to be borne
in mind that in recovering civil liability ex delicto, the same has
perforce to be determined in the criminal action, rooted as it is
in the court's pronouncement of the guilt or innocence of the
accused. This is but to render fealty to the intendment of
Article 100 of the Revised Penal Code which provides that
"every person criminally liable for a felony is also civilly liable."
In such cases, extinction of the criminal action due to death of
the accused pending appeal inevitably signifies the
concomitant extinction of the civil liability. Mors Omnia Solvi.
Death dissolves all things.
In sum, in pursuing recovery of civil liability arising from crime,
the final determination of the criminal liability is a condition
precedent to the prosecution of the civil action, such that when
the criminal action is extinguished by the demise of accused-
appellant pending appeal thereof, said civil action cannot
survive. The claim for civil liability springs out of and is
dependent upon facts which, if true, would constitute a crime.
Such civil liability is an inevitable consequence of the criminal
liability and is to be declared and enforced in the criminal
proceeding. This is to be distinguished from that which is
contemplated under Article 30 of the Civil Code which refers to
the institution of a separate civil action that does not draw its
life from a criminal proceeding. The Sendaydiego resolution of
July 8, 1977, however, failed to take note of this fundamental
distinction when it allowed the survival of the civil action for the
recovery of civil liability ex delicto by treating the same as a
separate civil action referred to under Article 30. Surely, it will
take more than just a summary judicial pronouncement to
authorize the conversion of said civil action to an independent
one such as that contemplated under Article 30.
Ironically however, the main decision in Sendaydiego did not
apply Article 30, the resolution of July 8, 1977 notwithstanding.
Thus, it was held in the main decision:
Sendaydiego's appeal will be resolved only for the purpose of
showing his criminal liability which is the basis of the civil
liability for which his estate would be liable. 13
In other words, the Court, in resolving the issue of his civil
liability, concomitantly made a determination on whether
Sendaydiego, on the basis of evidenced adduced, was indeed
guilty beyond reasonable doubt of committing the offense
charged. Thus, it upheld Sendaydiego's conviction and
pronounced the same as the source of his civil liability.
Consequently, although Article 30 was not applied in the final
determination of Sendaydiego's civil liability, there was a
reopening of the criminal action already extinguished which
served as basis for Sendaydiego's civil liability. We reiterate:
Upon death of the accused pending appeal of his conviction,
the criminal action is extinguished inasmuch as there is no
longer a defendant to stand as the accused; the civil action
instituted therein for recovery of civil liability ex delicto is ipso
facto extinguished, grounded as it is on the criminal.
Section 21, Rule 3 of the Rules of Court was also invoked to
serve as another basis for the Sendaydiego resolution of July 8,
1977. In citing Sec. 21, Rule 3 of the Rules of Court, the Court
made the inference that civil actions of the type involved in
Sendaydiego consist of money claims, the recovery of which
may be continued on appeal if defendant dies pending appeal
of his conviction by holding his estate liable therefor. Hence,
the Court's conclusion:
"When the action is for the recovery of money" "and the
defendant dies before final judgment in the court of First
Instance, it shall be dismissed to be prosecuted in the manner
especially provided" in Rule 87 of the Rules of Court (Sec. 21,
Rule 3 of the Rules of Court).
The implication is that, if the defendant dies after a money
judgment had been rendered against him by the Court of First
Instance, the action survives him. It may be continued on
appeal.
Sadly, reliance on this provision of law is misplaced. From the
standpoint of procedural law, this course taken in Sendaydiego
cannot be sanctioned. As correctly observed by Justice
Regalado:
I do not, however, agree with the justification advanced in both
Torrijos and Sendaydiego which, relying on the provisions of
Section 21, Rule 3 of the Rules of Court, drew the strained
implication therefrom that where the civil liability instituted
together with the criminal liabilities had already passed beyond
the judgment of the then Court of First Instance (now the
Regional Trial Court), the Court of Appeals can continue to
exercise appellate jurisdiction thereover despite the
extinguishment of the component criminal liability of the
deceased. This pronouncement, which has been followed in the
Court's judgments subsequent and consonant to Torrijos and
Sendaydiego, should be set aside and abandoned as being
clearly erroneous and unjustifiable.
Said Section 21 of Rule 3 is a rule of civil procedure in ordinary
civil actions. There is neither authority nor justification for its
application in criminal procedure to civil actions instituted
together with and as part of criminal actions. Nor is there any
authority in law for the summary conversion from the latter
category of an ordinary civil action upon the death of the
offender. . . .
Moreover, the civil action impliedly instituted in a criminal
proceeding for recovery of civil liability ex delicto can hardly be
categorized as an ordinary money claim such as that referred to
in Sec. 21, Rule 3 enforceable before the estate of the deceased
accused.
Ordinary money claims referred to in Section 21, Rule 3 must be
viewed in light of the provisions of Section 5, Rule 86 involving
claims against the estate, which in Sendaydiego was held liable
for Sendaydiego's civil liability. "What are contemplated in
Section 21 of Rule 3, in relation to Section 5 of Rule 86, 14 are
contractual money claims while the claims involved in civil
liability ex delicto may include even the restitution of personal
or real property." 15 Section 5, Rule 86 provides an exclusive
enumeration of what claims may be filed against the estate.
These are: funeral expenses, expenses for the last illness,
judgments for money and claim arising from contracts,
expressed or implied. It is clear that money claims arising from
delict do not form part of this exclusive enumeration. Hence,
there could be no legal basis in (1) treating a civil action ex
delicto as an ordinary contractual money claim referred to in
Section 21, Rule 3 of the Rules of Court and (2) allowing it to
survive by filing a claim therefor before the estate of the
deceased accused. Rather, it should be extinguished upon
extinction of the criminal action engendered by the death of
the accused pending finality of his conviction.
Accordingly, we rule: if the private offended party, upon
extinction of the civil liability ex delicto desires to recover
damages from the same act or omission complained of, he
must subject to Section 1, Rule 111 16 (1985 Rules on Criminal
Procedure as amended) file a separate civil action, this time
predicated not on the felony previously charged but on other
sources of obligation. The source of obligation upon which the
separate civil action is premised determines against whom the
same shall be enforced.
If the same act or omission complained of also arises from
quasi-delict or may, by provision of law, result in an injury to
person or property (real or personal), the separate civil action
must be filed against the executor or administrator 17 of the
estate of the accused pursuant to Sec. 1, Rule 87 of the Rules of
Court:
Sec. 1. Actions which may and which may not be brought
against executor or administrator. — No action upon a claim for
the recovery of money or debt or interest thereon shall be
commenced against the executor or administrator; but actions
to recover real or personal property, or an interest therein, from
the estate, or to enforce a lien thereon, and actions to recover
damages for an injury to person or property, real or personal,
may be commenced against him.
This is in consonance with our ruling in Belamala 18 where we
held that, in recovering damages for injury to persons thru an
independent civil action based on Article 33 of the Civil Code,
the same must be filed against the executor or administrator of
the estate of deceased accused and not against the estate
under Sec. 5, Rule 86 because this rule explicitly limits the claim
to those for funeral expenses, expenses for the last sickness of
the decedent, judgment for money and claims arising from
contract, express or implied. Contractual money claims, we
stressed, refers only to purely personal obligations other than
those which have their source in delict or tort.
Conversely, if the same act or omission complained of also
arises from contract, the separate civil action must be filed
against the estate of the accused, pursuant to Sec. 5, Rule 86 of
the Rules of Court.
From this lengthy disquisition, we summarize our ruling herein:
1. Death of the accused pending appeal of his conviction
extinguishes his criminal liability as well as the civil liability
based solely thereon. As opined by Justice Regalado, in this
regard, "the death of the accused prior to final judgment
terminates his criminal liability and only the civil liability
directly arising from and based solely on the offense
committed, i.e., civil liability ex delicto in senso strictiore."
2. Corollarily, the claim for civil liability survives
notwithstanding the death of accused, if the same may also be
predicated on a source of obligation other than delict. 19
Article 1157 of the Civil Code enumerates these other sources of
obligation from which the civil liability may arise as a result of
the same act or omission:
a) Law 20 b) Contracts c) Quasi-contracts d) e) Quasi-
delicts
3. Where the civil liability survives, as explained in Number 2
above, an action for recovery therefor may be pursued but only
by way of filing a separate civil action and subject to Section 1,
Rule 111 of the 1985 Rules on Criminal Procedure as amended.
This separate civil action may be enforced either against the
executor/administrator or the estate of the accused, depending
on the source of obligation upon which the same is based as
explained above.
4. Finally, the private offended party need not fear a forfeiture
of his right to file this separate civil action by prescription, in
cases where during the prosecution of the criminal action and
prior to its extinction, the private-offended party instituted
together therewith the civil action. In such case, the statute of
limitations on the civil liability is deemed interrupted during the
pendency of the criminal case, conformably with provisions of
Article 1155 21 of the Civil Code, that should thereby avoid any
apprehension on a possible privation of right by prescription. 22
Applying this set of rules to the case at bench, we hold that the
death of appellant Bayotas extinguished his criminal liability
and the civil liability based solely on the act complained of, i.e.,
rape. Consequently, the appeal is hereby dismissed without
qualification.
WHEREFORE, the appeal of the late Rogelio Bayotas is
DISMISSED with costs de oficio. SO ORDERED.
FRIAS VS SAN DIEGO-SISON
AUSTRIA-MARTINEZ, J.:
Before us is a Petition for Review on Certiorari filed by Bobie
Rose V. Frias represented by her Attorney-in-fact, Marie Regine
F. Fujita (petitioner) seeking to annul the Decision1 dated June
18, 2002 and the Resolution2 dated September 11, 2002 of the
Court of Appeals (CA) in CA-G.R. CV No. 52839.
Petitioner is the owner of a house and lot located at No. 589
Batangas East, Ayala Alabang, Muntinlupa, Metro Manila,
which she acquired from Island Masters Realty and
Development Corporation (IMRDC) by virtue of a Deed of Sale
dated Nov. 16, 1990.3 The property is covered by TCT No.
168173 of the Register of Deeds of Makati in the name of
IMRDC.4
On December 7, 1990, petitioner, as the FIRST PARTY, and Dra.
Flora San Diego-Sison (respondent), as the SECOND PARTY,
entered into a Memorandum of Agreement5 over the property
with the following terms:
NOW, THEREFORE, for and in consideration of the sum of
THREE MILLION PESOS (₱3,000,000.00) receipt of which is
hereby acknowledged by the FIRST PARTY from the SECOND
PARTY, the parties have agreed as follows:
1. That the SECOND PARTY has a period of Six (6) months from
the date of the execution of this contract within which to notify
the FIRST PARTY of her intention to purchase the
aforementioned parcel of land together within (sic) the
improvements thereon at the price of SIX MILLION FOUR
HUNDRED THOUSAND PESOS (₱6,400,000.00). Upon notice
to the FIRST PARTY of the SECOND PARTY’s intention to
purchase the same, the latter has a period of another six
months within which to pay the remaining balance of ₱3.4
million.
2. That prior to the six months period given to the SECOND
PARTY within which to decide whether or not to purchase the
above-mentioned property, the FIRST PARTY may still offer
the said property to other persons who may be interested to
buy the same provided that the amount of ₱3,000,000.00 given
to the FIRST PARTY BY THE SECOND PARTY shall be paid to
the latter including interest based on prevailing compounded
bank interest plus the amount of the sale in excess of
₱7,000,000.00 should the property be sold at a price more than
₱7 million.
3. That in case the FIRST PARTY has no other buyer within the
first six months from the execution of this contract, no interest
shall be charged by the SECOND PARTY on the P3 million
however, in the event that on the sixth month the SECOND
PARTY would decide not to purchase the aforementioned
property, the FIRST PARTY has a period of another six months
within which to pay the sum of ₱3 million pesos provided that
the said amount shall earn compounded bank interest for the
last six months only. Under this circumstance, the amount of P3
million given by the SECOND PARTY shall be treated as [a]
loan and the property shall be considered as the security for the
mortgage which can be enforced in accordance with law.
Petitioner received from respondent two million pesos in cash
and one million pesos in a post-dated check dated February 28,
1990, instead of 1991, which rendered said check stale.7
Petitioner then gave respondent TCT No. 168173 in the name of
IMRDC and the Deed of Absolute Sale over the property
between petitioner and IMRDC.
Respondent decided not to purchase the property and notified
petitioner through a letter8 dated March 20, 1991, which
petitioner received only on June 11, 1991,9 reminding
petitioner of their agreement that the amount of two million
pesos which petitioner received from respondent should be
considered as a loan payable within six months. Petitioner
subsequently failed to pay respondent the amount of two
million pesos.
On April 1, 1993, respondent filed with the Regional Trial Court
(RTC) of Manila, a complaint10 for sum of money with
preliminary attachment against petitioner. The case was
docketed as Civil Case No. 93-65367 and raffled to Branch 30.
Respondent alleged the foregoing facts and in addition thereto
averred that petitioner tried to deprive her of the security for
the loan by making a false report11 of the loss of her owner’s
copy of TCT No. 168173 to the Tagig Police Station on June 3,
1991, executing an affidavit of loss and by filing a petition12 for
the issuance of a new owner’s duplicate copy of said title with
the RTC of Makati, Branch 142; that the petition was granted in
an Order13 dated August 31, 1991; that said Order was
subsequently set aside in an Order dated April 10, 199214
where the RTC Makati granted respondent’s petition for relief
from judgment due to the fact that respondent is in possession
of the owner’s duplicate copy of TCT No. 168173, and ordered
the provincial public prosecutor to conduct an investigation of
petitioner for perjury and false testimony. Respondent prayed
for the ex-parte issuance of a writ of preliminary attachment
and payment of two million pesos with interest at 36% per
annum from December 7, 1991, ₱100,000.00 moral, corrective
and exemplary damages and ₱200,000.00 for attorney’s fees.
In an Order dated April 6, 1993, the Executive Judge of the RTC
of Manila issued a writ of preliminary attachment upon the
filing of a bond in the amount of two million pesos.15
Petitioner filed an Amended Answer16 alleging that the
Memorandum of Agreement was conceived and arranged by
her lawyer, Atty. Carmelita Lozada, who is also respondent’s
lawyer; that she was asked to sign the agreement without
being given the chance to read the same; that the title to the
property and the Deed of Sale between her and the IMRDC
were entrusted to Atty. Lozada for safekeeping and were never
turned over to respondent as there was no consummated sale
yet; that out of the two million pesos cash paid, Atty. Lozada
took the one million pesos which has not been returned, thus
petitioner had filed a civil case against her; that she was never
informed of respondent’s decision not to purchase the property
within the six month period fixed in the agreement; that when
she demanded the return of TCT No. 168173 and the Deed of
Sale between her and the IMRDC from Atty. Lozada, the latter
gave her these documents in a brown envelope on May 5, 1991
which her secretary placed in her attache case; that the
envelope together with her other personal things were lost
when her car was forcibly opened the following day; that she
sought the help of Atty. Lozada who advised her to secure a
police report, to execute an affidavit of loss and to get the
services of another lawyer to file a petition for the issuance of
an owner’s duplicate copy; that the petition for the issuance of
a new owner’s duplicate copy was filed on her behalf without
her knowledge and neither did she sign the petition nor testify
in court as falsely claimed for she was abroad; that she was a
victim of the manipulations of Atty. Lozada and respondent as
shown by the filing of criminal charges for perjury and false
testimony against her; that no interest could be due as there
was no valid mortgage over the property as the principal
obligation is vitiated with fraud and deception. She prayed for
the dismissal of the complaint, counter-claim for damages and
attorney’s fees
Trial on the merits ensued. On January 31, 1996, the RTC issued
a decision,17 the dispositive portion of which reads:
1) Ordering defendant to pay plaintiff the sum of P2 Million plus
interest thereon at the rate of thirty two (32%) per cent per
annum beginning December 7, 1991 until fully paid.
2) Ordering defendant to pay plaintiff the sum of ₱70,000.00
representing premiums paid by plaintiff on the attachment
bond with legal interest thereon counted from the date of this
decision until fully paid.
3) Ordering defendant to pay plaintiff the sum of ₱100,000.00
by way of moral, corrective and exemplary damages.
4) Ordering defendant to pay plaintiff attorney’s fees of
₱100,000.00 plus cost of litigation.18
The RTC found that petitioner was under obligation to pay
respondent the amount of two million pesos with compounded
interest pursuant to their Memorandum of Agreement; that the
fraudulent scheme employed by petitioner to deprive
respondent of her only security to her loaned money when
petitioner executed an affidavit of loss and instituted a petition
for the issuance of an owner’s duplicate title knowing the same
was in respondent’s possession, entitled respondent to moral
damages; and that petitioner’s bare denial cannot be accorded
credence because her testimony and that of her witness did not
appear to be credible.
The RTC further found that petitioner admitted that she
received from respondent the two million pesos in cash but the
fact that petitioner gave the one million pesos to Atty. Lozada
was without respondent’s knowledge thus it is not binding on
respondent; that respondent had also proven that in 1993, she
initially paid the sum of ₱30,000.00 as premium for the
issuance of the attachment bond, ₱20,000.00 for its renewal in
1994, and ₱20,000.00 for the renewal in 1995, thus plaintiff
should be reimbursed considering that she was compelled to go
to court and ask for a writ of preliminary attachment to protect
her rights under the agreement.
Petitioner filed her appeal with the CA. In a Decision dated June
18, 2002, the CA affirmed the RTC decision with modification,
the dispositive portion of which reads:
WHEREFORE, premises considered, the decision appealed
from is MODIFIED in the sense that the rate of interest is
reduced from 32% to 25% per annum, effective June 7, 1991
until fully paid.19
The CA found that: petitioner gave the one million pesos to
Atty. Lozada partly as her commission and partly as a loan;
respondent did not replace the mistakenly dated check of one
million pesos because she had decided not to buy the property
and petitioner knew of her decision as early as April 1991; the
award of moral damages was warranted since even granting
petitioner had no hand in the filing of the petition for the
issuance of an owner’s copy, she executed an affidavit of loss of
TCT No. 168173 when she knew all along that said title was in
respondent’s possession; petitioner’s claim that she thought
the title was lost when the brown envelope given to her by
Atty. Lozada was stolen from her car was hollow; that such
deceitful conduct caused respondent serious anxiety and
emotional distress.
The CA concluded that there was no basis for petitioner to say
that the interest should be charged for six months only and no
more; that a loan always bears interest otherwise it is not a
loan; that interest should commence on June 7, 199120 with
compounded bank interest prevailing at the time the two
million was considered as a loan which was in June 1991; that
the bank interest rate for loans secured by a real estate
mortgage in 1991 ranged from 25% to 32% per annum as
certified to by Prudential Bank,21 that in fairness to petitioner,
the rate to be charged should be 25% only.
Petitioner’s motion for reconsideration was denied by the CA in
a Resolution dated September 11, 2002.
Hence the instant Petition for Review on Certiorari filed by
petitioner raising the following issues:
(A) WHETHER OR NOT THE COMPOUNDED BANK INTEREST
SHOULD BE LIMITED TO SIX (6) MONTHS AS CONTAINED IN
THE MEMORANDUM OF AGREEMENT.
(B) WHETHER OR NOT THE RESPONDENT IS ENTITLED TO
MORAL DAMAGES.
(C) WHETHER OR NOT THE GRANT OF CORRECTIVE AND
EXEMPLARY DAMAGES AND ATTORNEY’S FEES IS PROPER
EVEN IF NOT MENTIONED IN THE TEXT OF THE DECISION.22
Petitioner contends that the interest, whether at 32% per
annum awarded by the trial court or at 25% per annum as
modified by the CA which should run from June 7, 1991 until
fully paid, is contrary to the parties’ Memorandum of
Agreement; that the agreement provides that if respondent
would decide not to purchase the property, petitioner has the
period of another six months to pay the loan with compounded
bank interest for the last six months only; that the CA’s ruling
that a loan always bears interest otherwise it is not a loan is
contrary to Art. 1956 of the New Civil Code which provides that
no interest shall be due unless it has been expressly stipulated
in writing.
We are not persuaded.
While the CA’s conclusion, that a loan always bears interest
otherwise it is not a loan, is flawed since a simple loan may be
gratuitous or with a stipulation to pay interest,23 we find no
error committed by the CA in awarding a 25% interest per
annum on the two-million peso loan even beyond the second
six months stipulated period.
The Memorandum of Agreement executed between the
petitioner and respondent on December 7, 1990 is the law
between the parties. In resolving an issue based upon a
contract, we must first examine the contract itself, especially
the provisions thereof which are relevant to the controversy.24
The general rule is that if the terms of an agreement are clear
and leave no doubt as to the intention of the contracting
parties, the literal meaning of its stipulations shall prevail.25 It
is further required that the various stipulations of a contract
shall be interpreted together, attributing to the doubtful ones
that sense which may result from all of them taken jointly.26
In this case, the phrase "for the last six months only" should be
taken in the context of the entire agreement. We agree with
and adopt the CA’s interpretation of the phrase in this wise:
Their agreement speaks of two (2) periods of six months each.
The first six-month period was given to plaintiff-appellee
(respondent) to make up her mind whether or not to purchase
defendant-appellant’s (petitioner's) property. The second six-
month period was given to defendant-appellant to pay the P2
million loan in the event that plaintiff-appellee decided not to
buy the subject property in which case interest will be charged
"for the last six months only", referring to the second six-month
period. This means that no interest will be charged for the first
six-month period while appellee was making up her mind
whether to buy the property, but only for the second period of
six months after appellee had decided not to buy the property.
This is the meaning of the phrase "for the last six months only".
Certainly, there is nothing in their agreement that suggests
that interest will be charged for six months only even if it takes
defendant-appellant an eternity to pay the loan.27
The agreement that the amount given shall bear compounded
bank interest for the last six months only, i.e., referring to the
second six-month period, does not mean that interest will no
longer be charged after the second six-month period since such
stipulation was made on the logical and reasonable expectation
that such amount would be paid within the date stipulated.
Considering that petitioner failed to pay the amount given
which under the Memorandum of Agreement shall be
considered as a loan, the monetary interest for the last six
months continued to accrue until actual payment of the loaned
amount.
The payment of regular interest constitutes the price or cost of
the use of money and thus, until the principal sum due is
returned to the creditor, regular interest continues to accrue
since the debtor continues to use such principal amount.28 It
has been held that for a debtor to continue in possession of the
principal of the loan and to continue to use the same after
maturity of the loan without payment of the monetary interest,
would constitute unjust enrichment on the part of the debtor at
the expense of the creditor.29
Petitioner and respondent stipulated that the loaned amount
shall earn compounded bank interests, and per the certification
issued by Prudential Bank, the interest rate for loans in 1991
ranged from 25% to 32% per annum. The CA reduced the
interest rate to 25% instead of the 32% awarded by the trial
court which petitioner no longer assailed.1awphi1.nét
In Bautista v. Pilar Development Corp.,30 we upheld the validity
of a 21% per annum interest on a ₱142,326.43 loan. In Garcia v.
Court of Appeals,31 we sustained the agreement of the parties
to a 24% per annum interest on an ₱8,649,250.00 loan. Thus,
the interest rate of 25% per annum awarded by the CA to a ₱2
million loan is fair and reasonable.
Petitioner next claims that moral damages were awarded on
the erroneous finding that she used a fraudulent scheme to
deprive respondent of her security for the loan; that such
finding is baseless since petitioner was acquitted in the case for
perjury and false testimony filed by respondent against her
We are not persuaded.
Article 31 of the Civil Code provides that when the civil action is
based on an obligation not arising from the act or omission
complained of as a felony, such civil action may proceed
independently of the criminal proceedings and regardless of
the result of the latter.32
While petitioner was acquitted in the false testimony and
perjury cases filed by respondent against her, those actions are
entirely distinct from the collection of sum of money with
damages filed by respondent against petitioner.
We agree with the findings of the trial court and the CA that
petitioner’s act of trying to deprive respondent of the security
of her loan by executing an affidavit of loss of the title and
instituting a petition for the issuance of a new owner’s
duplicate copy of TCT No. 168173 entitles respondent to moral
damages.1a\^/phi1.net Moral damages may be awarded in
culpa contractual or breach of contract cases when the
defendant acted fraudulently or in bad faith. Bad faith does not
simply connote bad judgment or negligence; it imports a
dishonest purpose or some moral obliquity and conscious doing
of wrong. It partakes of the nature of fraud.33
The Memorandum of Agreement provides that in the event
that respondent opts not to buy the property, the money given
by respondent to petitioner shall be treated as a loan and the
property shall be considered as the security for the mortgage. It
was testified to by respondent that after they executed the
agreement on December 7, 1990, petitioner gave her the
owner’s copy of the title to the property, the Deed of Sale
between petitioner and IMRDC, the certificate of occupancy,
and the certificate of the Secretary of the IMRDC who signed
the Deed of Sale.34 However, notwithstanding that all those
documents were in respondent’s possession, petitioner
executed an affidavit of loss that the owner’s copy of the title
and the Deed of Sale were lost.
Although petitioner testified that her execution of the affidavit
of loss was due to the fact that she was of the belief that since
she had demanded from Atty. Lozada the return of the title,
she thought that the brown envelope with markings which
Atty. Lozada gave her on May 5, 1991 already contained the
title and the Deed of Sale as those documents were in the same
brown envelope which she gave to Atty. Lozada prior to the
transaction with respondent.35 Such statement remained a
bare statement. It was not proven at all since Atty. Lozada had
not taken the stand to corroborate her claim. In fact, even
petitioner’s own witness, Benilda Ynfante (Ynfante), was not
able to establish petitioner's claim that the title was returned
by Atty. Lozada in view of Ynfante's testimony that after the
brown envelope was given to petitioner, the latter passed it on
to her and she placed it in petitioner’s attaché case36 and did
not bother to look at the envelope.37
It is clear therefrom that petitioner’s execution of the affidavit
of loss became the basis of the filing of the petition with the
RTC for the issuance of new owner’s duplicate copy of TCT No.
168173. Petitioner’s actuation would have deprived respondent
of the security for her loan were it not for respondent’s timely
filing of a petition for relief whereby the RTC set aside its
previous order granting the issuance of new title. Thus, the
award of moral damages is in order.
The entitlement to moral damages having been established,
the award of exemplary damages is proper.38 Exemplary
damages may be imposed upon petitioner by way of example
or correction for the public good.39 The RTC awarded the
amount of ₱100,000.00 as moral and exemplary damages.
While the award of moral and exemplary damages in an
aggregate amount may not be the usual way of awarding said
damages,40 no error has been committed by CA. There is no
question that respondent is entitled to moral and exemplary
damages.
Petitioner argues that the CA erred in awarding attorney’s fees
because the trial court’s decision did not explain the findings of
facts and law to justify the award of attorney’s fees as the same
was mentioned only in the dispositive portion of the RTC
decision.
We agree.
Article 220841 of the New Civil Code enumerates the instances
where such may be awarded and, in all cases, it must be
reasonable, just and equitable if the same were to be
granted.42 Attorney's fees as part of damages are not meant to
enrich the winning party at the expense of the losing litigant.
They are not awarded every time a party prevails in a suit
because of the policy that no premium should be placed on the
right to litigate.43 The award of attorney's fees is the exception
rather than the general rule. As such, it is necessary for the trial
court to make findings of facts and law that would bring the
case within the exception and justify the grant of such award.
The matter of attorney's fees cannot be mentioned only in the
dispositive portion of the decision.44 They must be clearly
explained and justified by the trial court in the body of its
decision. On appeal, the CA is precluded from supplementing
the bases for awarding attorney’s fees when the trial court
failed to discuss in its Decision the reasons for awarding the
same. Consequently, the award of attorney's fees should be
deleted.
WHEREFORE, in view of all the foregoing, the Decision dated
June 18, 2002 and the Resolution dated September 11, 2002 of
the Court of Appeals in CA-G.R. CV No. 52839 are AFFIRMED
with MODIFICATION that the award of attorney’s fees is
DELETED.
No pronouncement as to costs.
SO ORDERED.
DALURAYA VS OLIVA
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the
Decision2 dated June 28, 2013 and the Resolution3 dated
November 22, 2013 rendered by the Court of Appeals (CA) in
CA-G.R. SP No. 125113 finding petitioner Antonio L. Daluraya
(Daluraya) civilly liable for the death of Marina Arabit Oliva
(Marina Oliva) despite having been acquitted for Reckless
Imprudence Resulting in Homicide on the ground of
insufficiency of evidence.
The Fact
On January 4, 2006, Daluraya was charged in an Information4
for Reckless Imprudence Resulting in Homicide in connection
with the death5 of Marina Oliva. Records reveal that sometime
in the afternoon of January 3, 2006, Marina Oliva was crossing
the street when a Nissan Vanette, bearing plate number UPN-
172 and traversing EDSA near the Quezon Avenue flyover in
Quezon City, ran her over.6 While Marina Oliva was rushed to
the hospital to receive medical attention,she eventually died,
prompting her daughter, herein respondent Marla Oliva
(Marla), to file a criminal case for Reckless Imprudence
Resulting in Homicide against Daluraya, the purported driver of
the vehicle.7
During the proceedings, the prosecution presented as witness
Shem Serrano (Serrano), an eye-witness to the incident, who
testified that on said date, he saw a woman crossing EDSA
heading towards the island near the flyover and that the latter
was bumped by a Nissan Vanette bearing plate number UPN-
172. The prosecution also offered the testimonies of (a) Marla,
who testified as to the civil damages sustained by her family as
a result of her mother’s death; (b) Dr. Paul Ortiz (Dr. Ortiz), who
presented his findings on the autopsy conducted upon the body
of Marina Oliva; and (c) Police Senior Inspector Lauro Gomez
(PSI Gomez), who conducted the investigation following the
incident and claimed that Marina Oliva was hit by the vehicle
being driven by Daluraya, albeit he did not witness the
incident.8
After the prosecution rested its case, Daluraya filed an Urgent
Motion to Dismiss (demurrer)9 asserting, inter alia, that he was
not positively identified by any of the prosecution witnesses as
the driver of the vehicle that hit the victim, and that there was
no clear and competent evidence of how the incident
transpired.10
The MeTC Ruling
In an Order11 dated May 24, 2010, the Metropolitan Trial Court
of Quezon City, Branch 38 (MeTC) granted Daluraya’s demurrer
and dismissed the case for insufficiency of evidence. It found
that the testimonies of the prosecution witnesses were wanting
in material details and that they failed to sufficiently establish
that Daluraya committed the crime imputed upon him.12
Deconstructing the testimonies of the prosecution witnesses
individually, the MeTC found that: (a) Marla merely testified on
the damages sustained by her family but she failed to identify
Daluraya as the driver of the vehicle that hit her mother; (b)
Serrano also did not identify
Daluraya as the driver of the said vehicle; (c) Dr. Ortiz merely
testified on the autopsy results; and (d) PSI Gomez, while he
did investigate the incident, likewise declared thathe did not
witness the same.13
Marla moved for reconsideration,14 which the MeTC denied in
an Order15 dated November 4, 2010, clarifying that the grant
of Daluraya’s demurrer had the effect of an acquittal and that
reconsideration of its Order granting Daluraya’s demurrer
would violate the latter’s right against double jeopardy.16 With
respect to the civil aspect of the case, the MeTC likewise denied
the same, holding that no civil liability can be awarded absent
any evidence proving that Daluraya was the person responsible
for Marina Oliva’s demise.17
Aggrieved, Marla appealed18 to the Regional Trial Court of
Quezon City, Branch 76 (RTC), insisting that the MeTC failed to
make any finding as to the civil liability of Daluraya,19 which
finding was not precluded by the dismissal of the criminal
aspect of the case
The RTC Ruling
In a Decision20 dated September 8, 2011, the RTC dismissed
the appeal and affirmed the MeTC’s ruling,declaring that "the
act from which the criminal responsibility may spring did not at
all exist."21
Marla filed a motion for reconsideration22 which, although
filed beyond the reglementary period, was nonetheless
accepted. However, the RTC found the same without merit and
thus, sustained the factual findings and rulings of the MeTC in
its Order23 dated May 10, 2012. Dissatisfied, Marla elevated
the case to the CA via petition for review, maintaining that
Daluraya must be held civilly liable.
The CA Ruling
In a Decision24 dated June 28, 2013, the CA granted the
petition and reversed the RTC Decision, ordering Daluraya to
pay Marla the amounts of ₱152,547.00 as actual damages,
₱50,000.00 as civil indemnity, and ₱50,000.00 as moral
damages.25 In so ruling, the CA held that the MeTC’s Order
showed that Daluraya’s acquittal was based on the fact that the
prosecution failed to prove his guilt beyond reasonable doubt.
As such, Daluraya was not exonerated from civil liability.26
Moreover, the CA considered the following pieces of evidence
to support its finding that Daluraya must be held civilly liable:
(a) the inadmissible sworn statement executed by Daluraya
where he admitted that he drove the subject vehicle which hit
Marina Oliva; (b) the conclusion derived from Serrano’s
testimony that the woman he saw crossing the street who was
hit by a Nissan Vanette with plate number UPN-172, and the
victim who eventually died, are one and the same; (c) the
Philippine National Police Referral Letter of one Police Chief
Inspector Virgilio Pereda identifying Daluraya as the suspectin
the case of Reckless Imprudence Resulting in Homicide
involving the death of Marina Oliva, and stating that he
brought the victim to the Quezon City General Hospital for
treatment but was declared dead on arrival; and (d) the subject
vehicle was registered in the name of Daluraya’s aunt, Gloria
Zilmar,27 who authorized him to claim the vehicle from the
MeTC.28
Daluraya filed a motion for reconsideration,29 which the CA
denied in a Resolution30 dated November 22, 2013,hence, this
petition.
The Issue Before the Court
The sole issue advanced for the Court’s resolution is whether or
not the CA was correct in finding Daluraya civilly liable for
Marina Oliva’s death despite his acquittal in the criminal case
for Reckless Imprudence Resulting in Homicide on the ground
of insufficiency of evidence.
The Court’s Ruling
The petition is meritorious.
Every person criminally liable for a felony is also civilly liable.
The acquittal of an accused of the crime charged, however,
does not necessarily extinguish his civil liability.31 In Manantan
v. CA,32 the Court expounded on the two kinds of acquittal
recognized by our law and their concomitant effects on the civil
liability of the accused, as follows:
Our law recognizes two kinds of acquittal, with different effects
on the civil liability of the accused. First is an acquittal on the
ground that the accused is not the author of the actor omission
complained of. This instance closes the door to civil liability, for
a person who has been found to be not the perpetrator of any
act or omission cannot and can never be held liable for such act
or omission. There being no delict, civil liability ex delictois out
of the question, and the civil action, if any, which may be
instituted must be based on grounds other than the delict
complained of. This is the situation contemplated inRule 111 of
the Rules of Court. The second instance is an acquittal based on
reasonable doubt on the guilt of the accused. In this case, even
if the guilt of the accused has not been satisfactorily
established, he is not exempt from civil liability which may be
proved by preponderance of evidence only.3
In Dayap v. Sendiong,34 the Court explained further:
The acquittal of the accused does not automatically preclude a
judgment against him on the civil aspect of the case.1âwphi1
The extinction of the penal action does not carry with it the
extinction of the civil liability where: (a) the acquittal is based
on reasonable doubt as only preponderance of evidence is
required; (b) the court declares that the liability of the accused
is only civil; and (c) the civil liability of the accused does not
arise from or is not based upon the crime of which the accused
is acquitted. However, the civil action based on delictmay be
deemed extinguished if there is a finding on the final judgment
in the criminal action that the act or omission from which the
civil liability may arise did not exist or where the accused did
not commit the acts or omission imputed to him.
Thus, if demurrer is granted and the accused is acquitted by the
court, the accused has the right to adduce evidence on the civil
aspect of the case unless the court also declares that the act or
omission from which the civil liability may arise did not exist.
This is because when the accused files a demurrer to evidence,
he has not yet adduced evidence both on the criminal and civil
aspects of the case. The only evidence on record is the evidence
for the prosecution. What the trial court should do is issue an
order or partial judgment granting the demurrer to evidence
and acquitting the accused, and set the case for continuation of
trial for the accused to adduce evidence on the civil aspect of
the case and for the private complainant to adduce evidence by
way of rebuttal. Thereafter, the court shall render judgment on
the civil aspect of the case.35
In case of an acquittal, the Rules of Court requires that the
judgment state "whether the evidence of the prosecution
absolutely failed to prove the guilt of the accused or merely
failed to prove his guilt beyond reasonable doubt. In either
case, the judgment shall determine if the act or omission from
which the civil liability might arise did not exist."36
A punctilious examination of the MeTC’s Order, which the RTC
sustained, will show that Daluraya’s acquittal was based on the
conclusion that the act or omission from which the civil liability
may arise did not exist, given that the prosecution was not able
to establish that he was the author of the crime imputed
against him. Such conclusion is clear and categorical when the
MeTC declared that "the testimonies of the prosecution
witnesses are wanting in material details and they did not
sufficiently establish that the accused precisely committed the
crime charged against him."37 Furthermore, when Marla
sought reconsideration of the MeTC’s Order acquitting
Daluraya, said court reiterated and firmly clarified that "the
prosecution was not able to establish that the accused was the
driver of the Nissan Vanette which bumped Marina Oliva"38
and that "there is no competent evidence on hand which proves
that the accused was the person responsible for the death of
Marina Oliva."39
Clearly, therefore, the CA erred in construing the findings of the
MeTC, as affirmed by the RTC, that Daluraya’s acquittal was
anchored on reasonable doubt, which would necessarily call for
a remand of the case to the court a quo for the reception of
Daluraya’s evidence on the civil aspect.1âwphi1 Records
disclose that Daluraya’s acquittal was based on the fact that
"the act or omission from which the civil liability may arise did
not exist" in view of the failure of the prosecution to sufficiently
establish that he was the author of the crime ascribed against
him. Consequently, his civil liability should be deemed as non-
existent by the nature of such acquittal.
WHEREFORE, the petition is GRANTED. The Decision dated
June 28, 2013 and the Resolution dated November 22, 2013 of
the Court of Appeals in CA-G.R. SP No. 125113 are hereby
REVERSED and SET ASIDE. The Decision dated September
8,2011 and the Order dated May 10, 2012 of the Regional Trial
Court of Quezon City, Branch 76 are REINSTATED.
SO ORDERED.
PEOPLE VS DIONALDO
PERLAS-BERNABE, J.:
Before the Court is an appeal assailing the Decision1 dated
February 15, 2013 of the Court of Appeals (CA) in CA-G.R. CR-
H.C. No. 02888 finding accused-appellants Armando Dionaldo
y Ebron (Armando), Renato Dionaldo y Ebron (Renato),
Mariano Gariguez, Jr. y Ramos (Mariano), and Rodolfo Larido y
Ebron (Rodolfo) guilty beyond reasonable doubt of the crime of
Kidnapping and Serious Illegal Detention.
The Facts
At around 8 o'clock in the morning of May 16, 2003, Roderick
Navarro (Roderick) dropped his brother Edwin Navarro (Edwin)
off at the Health Is Wealth Gym in Caloocan City. Thirty
minutes later, he received a text message from another brother
who told him that Edwin had been kidnapped.2 Records show
that three (3) men, later identified as Armando, Renato, and
Mariano, forcibly dragged a bloodied Edwin down the stairway
of the gym and pushed him inside a dark green Toyota car with
plate number UKF 194.3 Upon receiving the message, Roderick
immediately reported the incident to the police. At around 10
o’clock in the morning of the same day, he received a phone
call from Edwin‟s kidnappers who threatened to kill Edwin if he
should report the matter to the police.4
The following day, Roderick received another call from the
kidnappers, who demanded the payment of ransom money in
the amount of ₱15,000,000.00. Roderick told them he had no
such money, as he only had ₱50,000.00. On May 19, 2003, after
negotiations over the telephone, the kidnappers agreed to
release Edwin in exchange for the amount of ₱110,000.00.
Roderick was then instructed to bring the money to Batangas
and wait for their next call.5
At around 7:30 in the evening of the same day, as Roderick was
on his way to Batangas to deliver the ransom money, the
kidnappers called and instructed him to open all the windows of
the car he was driving and to turn on the hazard light when he
reaches the designated place. After a while, Roderick received
another call directing him to exit in Bicutan instead and
proceed to C-5 until he arrives at the Centennial Village. He was
told to park beside the Libingan ng mga Bayani. After several
hours, an orange Mitsubishi car with plate number DEH 498
pulled up in front of his vehicle where four (4) men alighted.
Roderick saw one of the men take a mobile phone and upon
uttering the word "alat," the men returned to their car and
drove away.6
Meanwhile, a team had been organized to investigate the
kidnapping of Edwin, headed by SPO3 Romeo Caballero (SPO3
Caballero) and PO3 Nestor Acebuche (PO3 Acebuche) of the
Camp Crame Police Anti-Crime Emergency Response (PACER).
During the course of the investigation, Rodolfo, an employee at
the Health Is Wealth Gym, confessed to PO3 Acebuche that he
was part of the plan to kidnap Edwin, as in fact he was the one
who tipped off Mariano, Renato, Armando and a certain
Virgilio7 Varona8 (Virgilio) on the condition that he will be
given a share in the ransom money. Rodolfo gave information
on the whereabouts of his cohorts, leading to their arrest on
June 12, 2003. In the early morning of the following day or on
June 13, 2003, the PACER team found the dead body of Edwin
at Sitio Pugpugan Laurel, Batangas, which Roderick
identified.9
Thus, accused-appellants as well as Virgilio were charged in an
Information10 which reads:
That on or about the 16th day of May, 2003 in Caloocan City,
Metro Manila and within the jurisdiction of this Honorable
Court, the above-named accused, conspiring together and
mutually helping one another, being then private persons, did
then and there by force and intimidation willfully, unlawfully
and feloniously with the use of motor vehicle and superior
strength take, carry and deprive EDWIN NAVARRO Y ONA, of
his liberty against his will, for the purpose of extorting ransom
as in fact a demand of ₱15,000,000.00 was made as a condition
of the victim’s release and on the occasion thereof, the death of
the victim resulted.
Contrary to law.
During arraignment, accused-appellants pleaded not guilty11
and interposed the defenses of denial and alibi. Except for
Rodolfo, they individually claimed that on said date and time,
they were in their respective houses when they were taken by
men in police uniforms, then subsequently brought to Camp
Crame, and there allegedly tortured and detained. On the other
hand, Rodolfo, for himself, averred that at around 8 o’clock in
the evening of June 12, 2003, while walking on his way home,
he noticed that a van had been following him. Suddenly, four
(4) persons alighted from the vehicle, boarded him inside,
blindfolded him, and eventually tortured him. He likewise
claimed that he was made to sign an extrajudicial confession,
purporting too that while a certain Atty. Nepomuceno had
been summoned to assist him, the latter failed to do so.12
During trial, the death of the victim, Edwin, was established
through a Certificate of Death13 with Registry No. 2003-050
(subject certificate of death) showing that he died on May 19,
2003 from a gunshot wound on the head.
The RTC Ruling
In a Decision14 dated June 13, 2007, the Regional Trial Court of
Caloocan City, Branch 129 (RTC), in Crim. Case No. C-68329,
convicted accused-appellants of the crime of Kidnapping and
Serious Illegal Detention, sentencing each of them to suffer the
penalty of reclusion perpetua.
It gave credence to the positive and straightforward
testimonies of the prosecution witnesses which clearly
established that it was the accusedappellants who forcibly
dragged a bloodied Edwin into a car and, consequently,
deprived him of his liberty.15 In light thereof, it rejected
accused-appellants‟ respective alibis and claims of torture,
which were not substantiated. It also held that the crime of
Kidnapping had been committed for the purpose of extorting
ransom, which is punishable by death. However, in view of the
suspended imposition of the death penalty pursuant to
Republic Act No. (RA) 9346,16 only the penalty of reclusion
perpetua was imposed.17 Further, the RTC found that
conspiracy attended the commission of the crime, as the
accused-appellants’ individual participation was geared toward
a joint purpose and criminal design.18
Notably, while the RTC found that the testimonies of the
prosecution witnesses prove that the victim Edwin was
abducted, deprived of liberty, and eventually killed,19 a fact
which is supported by the subject certificate of death, it did not
consider said death in its judgment. The CA Ruling
In a Decision20 dated February 15, 2013, the CA affirmed in
toto the RTC’s conviction of accused-appellants, finding that
the prosecution was able to clearly establish all the elements of
the crime of Kidnapping and Serious Illegal Detention, namely:
(a) the offender is a private individual; (b) he kidnaps or detains
another, or in any manner deprives the latter of his liberty; (c)
the act of detention or kidnapping must be illegal; and (d) in the
commission of the offense, any of the following circumstances
is present: (1) the kidnapping or detention lasts for more than
three days; (2) it is committed simulating public authority; (3)
any serious physical injuries are inflicted upon the person
kidnapped or detained or threats to kill him are made; or (4) the
person kidnapped or detained is a minor, except when the
accused is any of the parents, female or a public officer.21 It
likewise sustained the finding that the kidnapping was
committed for the purpose of extorting ransom, as sufficiently
proven by the testimony of the brother of the victim.22
Moreover, the CA affirmed that conspiracy attended the
commission of the crime, as the acts of accused-appellants
emanated from the same purpose or common design, and they
were united in its execution.23
Separately, the CA found that accused-appellants’ claims of
torture were never supported, and that Rodolfo voluntarily
signed the extrajudicial confession and was afforded
competent and independent counsel in its execution.24
Aggrieved by their conviction, accused-appellants filed the
instant appeal.
The Issue Before the Court
The sole issue to be resolved by the Court is whether or not
accusedappellants are guilty of the crime of Kidnapping and
Serious Illegal Detention.
The Court’s Rulin
The appeal is devoid of merit.
Well-settled is the rule that the question of credibility of
witnesses is primarily for the trial court to determine. Its
assessment of the credibility of a witness is entitled to great
weight, and it is conclusive and binding unless shown to be
tainted with arbitrariness or unless, through oversight, some
fact or circumstance of weight and influence has not been
considered. Absent any showing that the trial judge
overlooked, misunderstood, or misapplied some facts or
circumstances of weight which would affect the result of the
case, or that the judge acted arbitrarily, his assessment of the
credibility of witnesses deserves high respect by the appellate
court.25
In this case, the RTC, as affirmed by the CA, gave weight and
credence to the testimonies of the prosecution witnesses,
which they found to be straightforward and consistent.
Through these testimonies, it was clearly established that
accused-appellants, who were all private individuals, took the
victim Edwin and deprived him of his liberty, which acts were
illegal, and for the purpose of extorting ransom.26 Thus, seeing
no semblance of arbitrariness or misapprehension on the part
of the court a quo, the Court finds no compelling reason to
disturb its factual findings on this score.1âwphi1
Anent the finding that conspiracy attended the commission of
the crime, the Court likewise finds the conclusion of the RTC in
this regard, as affirmed by the CA, to be well-taken. Conspiracy
exists when two or more persons come to an agreement
concerning the commission of a felony and decide to commit it,
and when conspiracy is established, the responsibility of the
conspirators is collective, not individual, rendering all of them
equally liable regardless of the extent of their respective
participations.27 In this relation, direct proof is not essential to
establish conspiracy, as it can be presumed from and proven by
the acts of the accused pointing to a joint purpose, design,
concerted action, and community of interests.28 Hence, as the
factual circumstances in this case clearly show that accused-
appellants acted in concert at the time of the commission of
the crime and that their acts emanated from the same purpose
or common design, showing unity in its execution,29 the CA,
affirming the trial court, correctly ruled that there was
conspiracy among them.
The foregoing notwithstanding, the Court is, however,
constrained to modify the ruling of the RTC and the CA, as the
crime the accusedappellants have committed does not, as the
records obviously bear, merely constitute Kidnapping and
Serious Illegal Detention, but that of the special complex crime
of Kidnapping for Ransom with Homicide. This is in view of the
victim’s (i.e., Edwin’s) death, which was (a) specifically charged
in the Information,30 and (b) clearly established during the trial
of this case. Notably, while this matter was not among the
issues raised before the Court, the same should nonetheless be
considered in accordance with the settled rule that in a criminal
case, an appeal, as in this case, throws open the entire case
wide open for review, and the appellate court can correct
errors, though unassigned, that may be found in the appealed
judgment.31
After the amendment of the Revised Penal Code on December
31, 1993 by RA 7659, Article 267 of the same Code now
provides:
Art. 267. Kidnapping and serious illegal detention. – Any private
individual who shall kidnap or detain another, or in any other
manner deprive him of his liberty, shall suffer the penalty of
reclusion perpetua to death:
1. If the kidnapping or detention shall have lasted more than
three days.
2. If it shall have been committed simulating public authority
3. If any serious physical injuries shall have been inflicted upon
the person kidnapped or detained; or if threats to kill him shall
have been made.
4. If the person kidnapped or detained shall be a minor, except
when the accused is any of the parents, female or a public
officer;
The penalty shall be death where the kidnapping or detention
was committed for the purpose of extorting ransom from the
victim or any other person, even if none of the circumstances
above-mentioned were present in the commission of the
offense.
When the victim is killed or dies as a consequence of the
detention or is raped, or is subjected to torture or
dehumanizing acts, the maximum penalty shall be imposed.
(Emphases supplied)
The Court further elucidated in People v. Mercado:32
In People v. Ramos, the accused was found guilty of two
separate heinous crimes of kidnapping for ransom and murder
committed on July 13, 1994 and sentenced to death. On appeal,
this Court modified the ruling and found the accused guilty of
the "special complex crime" of kidnapping for ransom with
murder under the last paragraph of Article 267, as amended by
Republic Act No. 7659. This Court said
x x x This amendment introduced in our criminal statutes the
concept of „special complex crime‟ of kidnapping with murder
or homicide. It effectively eliminated the distinction drawn by
the courts between those cases where the killing of the
kidnapped victim was purposely sought by the accused, and
those where the killing of the victim was not deliberately
resorted to but was merely an afterthought. Consequently, the
rule now is: Where the person kidnapped is killed in the course
of the detention, regardless of whether the killing was
purposely sought or was merely an afterthought, the
kidnapping and murder or homicide can no longer be
complexed under Art. 48, nor be treated as separate crimes,
but shall be punished as a special complex crime under the last
paragraph of Art. 267, as amended by RA No. 7659.33
Thus, further taking into account the fact that the kidnapping
was committed for the purpose of extorting ransom, accused-
appellants’ conviction must be modified from Kidnapping and
Serious Illegal Detention to the special complex crime of
Kidnapping for Ransom with Homicide, which carries the
penalty of death. As earlier intimated, the enactment of RA
9346 had suspended the imposition of the death penalty. This
means that the accused-appellants could, as the CA and trial
court properly ruled, only be sentenced to the penalty of
reclusion perpetua. To this, the Court adds that the accused-
appellants are not eligible for parole.34
On a final note, the Court observes that the RTC and the CA
failed to award civil indemnity as well as damages to the family
of the kidnap victim. In People v. Quiachon,35 the Court
explained that even if the death penalty was not to be imposed
on accused-appellants in view of the prohibition in RA 9346, the rate of six percent (6%) per annum ·from the date of finality of
award of civil indemnity was nonetheless proper, not being judgment until fully paid.
dependent on the actual imposition of the death penalty but on
the fact that qualifying circumstances warranting the SO ORDERED.
imposition of the death penalty attended the commission of
the crime.36 In the present case, considering that both the
qualifying circumstances of ransom and the death of the victim
during captivity were duly alleged in the information and
proven during trial, civil indemnity in the amount of
₱100,000.00 must therefore be awarded to the family of the
victim, to conform with prevailing jurisprudence.37

Similarly, the Court finds that the award of moral damages is

warranted in this case. Under Article 2217 of the Civil Code,
moral damages include physical suffering, mental anguish,
fright, serious anxiety, wounded feelings, moral shock and
similar injury, while Article 2219 of the same Code provides that
moral damages may be recovered in cases of illegal detention.
It cannot be denied, in this case, that the kidnap victim‟s family
suffered mental anguish, fright, and serious anxiety over the
detention and eventually, the death of Edwin. As such, and in
accordance with prevailing jurisprudence,38 moral damages in
the amount of ₱100,000.00 must perforce be awarded to the
family of the victim.

Finally, exemplary damages must be awarded in this case, in

view of the confluence of the aforesaid qualifying
circumstances and in order to deter others from committing
the same atrocious acts. In accordance with prevailing
jurisprudence,39 therefore, the Court awards exemplary
damages in the amount of ₱100,000.00 to the family of the
kidnap victim.

In addition, interest at the rate of six percent (6%) per annum

shall be imposed on all damages awarded from the date of
finality of judgment until fully paid, pursuant to prevailing
jurisprudence.40

WHEREFORE, the appeal is DISMISSED. The Decision dated

February 15, 2013 of the Court of Appeals in CA-G.R. CR-H.C.
No. 02888 is hereby AFFIRMED with the MODIFICATION that
all the accusedappellants herein are equally found GUILTY of
the special complex crime of Kidnapping for Ransom with
Homicide, and are sentenced to each suffer the penalty of
reclusion perpetua, without eligibility for parole, and to pay,
jointly and severally, the family of the kidnap victim Edwin
Navarro the following amounts: (1) ₱100,000.00 as civil
indemnity; (2) ₱100,000.00 as moral damages; and (3)
₱100,000.00 as exemplary damages, all with interest at the DY VS PEOPLE

JARDELEZA, J.:
Our law states that every person criminally liable for a felony is
also civilly liable. This civil liability ex delicto may be recovered
through a civil action which, under our Rules of Court, is
deemed instituted with the criminal action. While they are
actions mandatorily fused,1 they are, in truth, separate actions
whose existences are not dependent on each other. Thus, civil
liability ex delicto survives an acquittal in a criminal case for
failure to prove guilt beyond reasonable doubt. However, the
Rules of Court limits this mandatory fusion to a civil action for
the recovery of civil liability ex delicto. It, by no means, includes
a civil liability arising from a different source of obligation, as in
the case of a contract. Where the civil liability is ex contractu,
the court hearing the criminal case has no authority to award
damages.
The Case
This is a Petition for Review on Certiorari under Rule 45 of the
Rules of Court. Petitioner Gloria S. Dy (petitioner) seeks the
reversal of the decision of the Court of Appeals (CA) dated
February 25, 2009 (Assailed Decision)2 ordering her to pay
Mandy Commodities Company, Inc. (MCCI) in the amount of
P21,706,281.00.
The Facts
Petitioner was the former General Manager of MCCL. In the
course of her employment, petitioner assisted MCCI in its
business involving several properties. One such business
pertained to the construction of warehouses over a property
(Numancia Property) that MCCI leased from the Philippine
National Bank (PNB). Sometime in May 1996, in pursuit of
MCCI's business, petitioner proposed to William Mandy
(Mandy), President of MCCI, the purchase of a property owned
by Pantranco. As the transaction involved a large amount of
money, Mandy agreed to obtain a loan from the International
China Bank of Commerce (ICBC). Petitioner represented that
she could facilitate the approval of the loan. True enough, ICBC
granted a loan to MCCI in the amount of P20,000,000.00,
evidenced by a promissory note. As security, MCCI also
executed a chattel mortgage over the warehouses in the
Numancia Property. Mandy entrusted petitioner with the
obligation to manage the payment of the loan.
In February 1999, MCCI received a notice of foreclosure over
the mortgaged property due to its default in paying the loan
obligation.5 In order to prevent the foreclosure, Mandy
instructed petitioner to facilitate the payment of the loan.
MCCI, through Mandy, issued 13 Allied Bank checks and 12 Asia
Trust Bank checks in varying amounts and in different dates
covering the period from May 18, 1999 to April 4, 2000.6 The
total amount of the checks, which were all payable to cash, was
P21,706,281.00. Mandy delivered the checks to petitioner.
Mandy claims that he delivered the checks with the instruction
that petitioner use the checks to pay the loan.7 Petitioner, on
the other hand, testified that she encashed the checks and
returned the money to Mandy.8 ICBC eventually foreclosed the
mortgaged property as MCCI continued to default in its
obligation to pay. Mandy claims that it was only at this point in
time that he discovered that not a check was paid to ICBC.
Thus, on October 7, 2002, MCCI, represented by Mandy, filed a
Compiamt-Affidavit for Estafa10 before the Office of the City
Prosecutor of Manila. On March 3, 2004, an Information11 was
filed against petitioner before the Regional Trial Court (RTC)
Manila.
After a full-blown trial, the RTC Manila rendered a decision12
dated November 11, 2005 (RTC Decision) acquitting petitioner.
The RTC Manila found that while petitioner admitted that she
received the checks, the prosecution failed to establish that she
was under any obligation to deliver them to ICBC in payment of
MCCFs loan. The trial court made this finding on the strength of
Mandy's admission that he gave the checks to petitioner with
the agreement that she would encash them. Petitioner would
then pay ICBC using her own checks. The trial court further
made a finding that Mandy and petitioner entered into a
contract of loan.13 Thus, it held that the prosecution failed to
establish an important element of the crime of estafa—
misappropriation or conversion. However, while the RTC
Manila acquitted petitioner, it ordered her to pay the amount of
the checks. The dispositive portion of the RTC Decision states
— Our laws recognize a bright line distinction between criminal
WHEREFORE, the prosecution having failed to establish the
guilt of the accused beyond reasonable doubt, judgment is
hereby rendered ACQUITTING the accused of the offense
charged. With costs de officio.
The accused is however civilly liable to the complainant for the
amount of P21,706,281.00.
SO ORDERED.
Petitioner filed an appeal15 of the civil aspect of the RTC
Decision with the CA. In the Assailed Decision,16 the CA found
the appeal without merit. It held that the acquittal of petitioner
does not necessarily absolve her of civil liability. The CA said
that it is settled that when an accused is acquitted on the basis
of reasonable doubt, courts may still find him or her civilly liable
if the evidence so warrant. The CA explained that the evidence
on record adequately prove that petitioner received the checks
as a loan from MCCI. Thus, preventing the latter from
recovering the amount of the checks would constitute unjust
enrichment. Hence, the Assailed Decision ruled
WHEREFORE, in view of the foregoing, the appeal is DENIED.
The Decision dated November 11, 2005 of the Regional Trial
Court, Manila, Branch 33 in Criminal Case No. 04-224294 which
found Gloria Dy civilly liable to William Mandy is AFFIRMED.
SO ORDERED.
The CA also denied petitioner's motion for reconsideration in a
resolution18 dated August 3, 2009.
Hence, this Petition for Review on Certiorari (Petition).
Petitioner argues that since she was acquitted for failure of the
prosecution to prove all the elements of the crime charged,
there was therefore no crime committed.19 As there was no
crime, any civil liability ex delicto cannot be awarded.
The Issues
The central issue is the propriety of making a finding of civil
liability in a criminal case for estafa when the accused is
acquitted for failure of the prosecution to prove all the
elements of the crime charged.
The Ruling of the Court
We grant the petition.
Civil Liability Arising From Crime
and civil liabilities. A crime is a liability against the state. It is
prosecuted by and for the state. Acts considered criminal are
penalized by law as a means to protect the society from
dangerous transgressions. As criminal liability involves a
penalty affecting a person's liberty, acts are only treated
criminal when the law clearly says so. On the other hand, civil
liabilities take a less public and more private nature. Civil
liabilities are claimed through civil actions as a means to
enforce or protect a right or prevent or redress a wrong.20
They do not carry with them the imposition of imprisonment as
a penalty. Instead, civil liabilities are compensated in the form
of damages.
Nevertheless, our jurisdiction recognizes that a crime has a
private civil component. Thus, while an act considered criminal
is a breach of law against the State, our legal system allows for
the recovery of civil damages where there is a private person
injured by a criminal act. It is in recognition of this dual nature
of a criminal act that our Revised Penal Code provides that
every person criminally liable is also civilly liable.21 This is the
concept of civil liability ex delicto.
This is echoed by the New Civil Code when it recognizes acts or
omissions punished by law as a separate source of
obligation.22 This is reinforced by Article 30 of the same code
which refers to the filing of a separate civil action to demand
civil liability arising from a criminal offense.
The Revised Penal Code fleshes out this civil liability in Article
10424 which states that it includes restitution, reparation of
damage caused and indemnification for consequential
damages.
Rules of procedure for criminal and civil actions involving the
same act or omission
The law and the rules of procedure provide for a precise
mechanism in instituting a civil action pertaining to an act or
omission which is also subject of a criminal case. Our Rules of
Court prescribes a kind of fusion such that, subject to certain
defined qualifications, when a criminal action is instituted, the
civil action for the recovery of the civil liability arising from the
offense is deemed instituted as well.
However, there is an important difference between civil and
criminal proceedings that require a fine distinction as to how
these twin actions shall proceed. These two proceedings
involve two different standards of proof. A criminal action
requires proof of guilt beyond reasonable doubt while a civil
action requires a lesser quantum of proof, that of
preponderance of evidence. This distinction also agrees with
the essential principle in our legal system that while a criminal
liability carries with it a corresponding civil liability, they are
nevertheless separate and distinct. In other words, these two
liabilities may co-exist but their existence is not dependent on
each other.
The Civil Code states that when an accused in a criminal
prosecution is acquitted on the ground that his guilt has not
been proven beyond reasonable doubt, a civil action for
damages for the same act or omission may be filed. In the latter
case, only preponderance of evidence is required.27 This is
supported by the Rules of Court which provides that the
extinction of the criminal action does not result in the
extinction of the corresponding civil action.28 The latter may
only be extinguished when there is a "finding in a final
judgment in the criminal action that the act or omission from
which the civil liability may arise did not exist."29 Consistent
with this, the Rules of Court requires that in judgments of
acquittal the court must state whether "the evidence of the
prosecution absolutely failed to prove the guilt of the accused
or merely failed to prove his guilt beyond reasonable doubt. In
either case, the judgment shall determine if the act or omission
from which the civil liability might arise did not exist."
Thus, whether an exoneration from the criminal action should
affect the corresponding civil action depends on the varying
kinds of acquittal. In Manantan v. Court of Appeals,31 we
explained —
Our law recognizes two kinds of acquittal, with different effects
on the civil liability of the accused. First is an acquittal on the
ground that the accused is not the author of the act or omission
complained of. This instance closes the door to civil liability, for
a person who has been found to be not the perpetrator of any
act or omission cannot and can never be held liable for such act
or omission. There being no delict civil liability ex delicto is out
of the question, and the civil action, if any, which may be
instituted must be based on grounds other than the delict
complained of. This is the situation contemplated in Rule 111 of
the Rules of Court. The second instance is an acquittal based on
reasonable doubt on the guilt of the accused. In this case, even
if the guilt of the accused has not been satisfactorily
established, he is not exempt from civil liability which may be
proved by preponderance of evidence only. This is the situation
contemplated in Article 29 of the Civil Code, where the civil
action for damages is "for the same act or omission." Although
the two actions have different purposes, the matters discussed
in the civil case are similar to those discussed in the criminal
case. However, the judgment In the criminal proceeding cannot
be read in evidence In the civil action to establish any fact there
determined, even though both actions involve the same act or
omission. The reason for this rule is that the parties are not the
same and secondarily, different rules of evidence are
applicable. Hence, notwithstanding herein petitioner's
acquittal, the Court of Appeals in determining whether Article
29 applied, was not precluded from looking into the question of
petitioner's negligence or reckless imprudence.
In Dayap v. Sendiong,33 we further said —
The acquittal of the accused does not automatically preclude a
judgment against him on the civil aspect of the case. The
extinction of the penal action does not carry with it the
extinction of the civil liability where: (a) the acquittal is based
on reasonable doubt as only preponderance of evidence is
required; (b) the court declares that the liability of the accused
is only civil; and (c) the civil liability of the accused does not
arise from or is not based upon the crime of which the accused
is acquitted. However, the civil action based on delict may be
deemed extinguished if mere is a finding on the final judgment
in the criminal action that the act or omission from which the
civil liability may arise did not exist or where the accused did
not commit the acts or omission imputed to him.
Hence, a civil action filed for the purpose of enforcing civil
liability ex delicto, even if mandatorily instituted with the
corresponding criminal action, survives an acquittal when it is
based on the presence of reasonable doubt. In these instances,
while the evidence presented does not establish the fact of the
crime with moral certainty, the civil action still prevails for as
long as the greater weight of evidence tilts in favor of a finding
of liability. This means that while the mind of the court cannot
rest easy in penalizing the accused for the commission of a
crime, it nevertheless finds that he or she committed or
omitted to perform acts which serve as a separate source of
obligation. There is no sufficient proof that the act or omission
is criminal beyond reasonable doubt, but there is a
preponderance of evidence to show that the act or omission
caused injury which demands compensation.
Civil Liability Ex Delicto in Estafa Cases
Our laws penalize criminal fraud which causes damage capable
of pecuniary estimation through estafa under Article 315 of the
Revised Penal Code. In general, the elements of estafa are:
(1)
That the accused defrauded another (a) by abuse of
confidence, or (b) by means of deceit; and
(2)
That damage or prejudice capable of pecuniary estimation is
caused to the offended party or third person.
The essence of the crime is the unlawful abuse of confidence or
deceit in order to cause damage. As this Court previously held,
"the element of fraud or bad faith is indispensable."35 Our law
abhors the act of defrauding another person by abusing his
trust or deceiving him, such that, it criminalizes this kind of
fraud.
Article 315 of the Revised Penal Code identifies the
circumstances which constitute estafa. Article 315, paragraph 1
(b) states that estafa is committed by abuse of confidence —
Art. 315. Swindling (estafa) - x x x (b) By misappropriating or
converting, to the prejudice of another, money, goods, or any
other personal property received by the offender in trust or on
commission, or for administration, or under any other
obligation involving the duty to make delivery of or to return
the same, even though such obligation be totally or partially
guaranteed by a bond; or by denying having received such
money, goods, or other property.
In this kind of estafa, the fraud which the law considers as
criminal is the act of misappropriation or conversion. When the
element of misappropriation or conversion is missing, there can
be no estafa. In such case, applying the foregoing discussions
on civil liability ex delicto, there can be no civil liability as there
is no act or omission from which any civil liability may be
sourced. However, when an accused is acquitted because a
reasonable doubt exists as to the existence of misappropriation
or conversion, then civil liability may still be awarded. This
means that, while there is evidence to prove fraud, such
evidence does not suffice to convince the court to the point of
moral certainty that the act of fraud amounts to estafa. As the
act was nevertheless proven, albeit without sufficient proof
justifying the imposition of any criminal penalty, civil liability
exists.
In this case, the RTC Manila acquitted petitioner because the
prosecution failed to establish by sufficient evidence the
element of misappropriation or conversion. There was no
adequate evidence to prove that Mandy gave the checks to
petitioner with the instruction that she will use them to pay the
ICBC loan. Citing Mandy's own testimony in open court, the
RTC Manila held that when Mandy delivered the checks to
petitioner, their agreement was that it was a "sort of loan."36 In
the dispositive portion of the RTC Decision, the RTC Manila
ruled that the prosecution "failed to establish the guilt of the
accused beyond reasonable doubt."37 It then proceeded to
order petitioner to pay the amount of the loan.
The ruling of the RTC Manila was affirmed by the CA. It said
that "[t]he acquittal of Gloria Dy is anchored on the ground that
her guilt was not proved beyond reasonable doubt - not
because she is not the author of the act or omission complained
of. x x x The trial court found no trickery nor deceit in obtaining
money from the private complainant; instead, it concluded that
the money obtained was undoubtedly a loan."38
Our jurisprudence on this matter diverges.
Earlier cases ordered the dismissal of the civil action for
recovery of civil liability ex delicto whenever there is a finding
that there was no estafa but rather an obligation to pay under a
contract. In People v. Pantig,39 this Court affirmed the ruling of
the lower court acquitting Pantig, but revoked the portion
sentencing him to pay the offended party the amount of money
alleged to have been obtained through false and fraudulent
representations, thus —
The trial court found as a fact that the sum of P1,200, ordered
to be paid in the judgment of acquittal, was received by the
defendant-appellant as loan. This finding is inconsistent with
the existence of the criminal act charged in the information.
The liability of the defendant for the return of the amount so
received arises from a civil contract, not from a criminal act,
and may not be enforced in the criminal case.
The portion of the judgment appealed from, which orders the
defendant-appellant to pay the sum of Pi ,200 to the offended
party, is hereby revoked, without prejudice to the filing of a civil
action for the recovery of the said amount.
This was also the import of the ruling in People v. Singson.41 In
that case, this Court found that "the evidence [was] not
sufficient to establish the existence of fraud or deceit on the
part of the accused. x x x And when there is no proven deceit or
fraud, there is no crime of estafa."42 While we also said that
the established facts may prove Singson's civil liability
(obligation to pay under a contract of sale), we nevertheless
made no finding of civil liability because "our mind cannot rest
easy on the certainty of guilt"43 considering the above finding.
The dispositive portion stated that Singson is acquitted
"without prejudice to any civil liability which may be
established in a civil case against her."
However, our jurisprudence on the matter appears to have
changed in later years.
In Eusebio-Calderon v. People,45 this Court affirmed the
finding of the CA that Calderon "did not employ trickery or
deceit in obtaining money from the private complainants,
instead, it concluded that the money obtained was
undoubtedly loans for which [Calderon] paid interest."46 Thus,
this Court upheld Calderon's acquittal of estafa, but found her
civilly liable for the principal amount borrowed from the private
complainants.
The ruling was similar in People v. Cuyugan.48 In that case, we
acquitted Cuyugan of estafa for failure of the prosecution to
prove fraud. We held that the transaction between Cuyugan
and private complainants was a loan to be used by Cuyugan in
her business. Thus, this Court ruled that Cuyugan has the
obligation, which is civil in character, to pay the amount
borrowed.
We hold that the better rule in ascertaining civil liability in
estafa cases is that pronounced in Pantig and Singson. The
rulings in these cases are more in accord with the relevant
provisions of the Civil Code, and the Rules of Court. They are
also logically consistent with this Court's pronouncement in
Manantan.
Under Pantig and Singson, whenever the elements of estafa
are not established, and that the delivery of any personal
property was made pursuant to a contract, any civil liability
arising from the estafa cannot be awarded in the criminal case.
This is because the civil liability arising from the contract is not
civil liability ex delicto, which arises from the same act or
omission constituting the crime. Civil liability ex delicto is the
liability sought to be recovered in a civil action deemed
instituted with the criminal case.
The situation envisioned in the foregoing cases, as in this case,
is civil liability ex contractu where the civil liability arises from
an entirely different source of obligation. Therefore, it is not
the type of civil action deemed instituted in the criminal case,
and consequently must be filed separately. This is necessarily
so because whenever the court makes a finding that the
elements of estafa do not exist, it effectively says that there is
no crime. There is no act or omission that constitutes criminal
fraud. Civil liability ex delicto cannot be awarded as it cannot be
sourced from something that does not exist.
When the court finds that the source of obligation is in fact, a
contract, as in a contract of loan, it takes a position completely
inconsistent with the presence of estafa. In estafa, a person
parts with his money because of abuse of confidence or deceit.
In a contract, a person willingly binds himself or herself to give
something or to render some service.50 In estafa, the accused's
failure to account for the property received amounts to criminal
fraud. In a contract, a party's failure to comply with his
obligation is only a contractual breach. Thus, any finding that
the source of obligation is a contract negates estafa. The
finding, in turn, means that there is no civil liability ex delicto.
Thus, the rulings in the foregoing cases are consistent with the
concept of fused civil and criminal actions, and the different
sources of obligations under our laws.

We apply this doctrine to the facts of this case. Petitioner was
acquitted by the RTC Manila because of the absence of the
element of misappropriation or conversion. The RTC Manila, as
affirmed by the CA, found that Mandy delivered the checks to
petitioner pursuant to a loan agreement. Clearly, there is no
crime of estafa. There is no proof of the presence of any act or
omission constituting criminal fraud. Thus, civil liability ex
delicto cannot be awarded because there is no act or omission
punished by law which can serve as the source of obligation.
Any civil liability arising from the loan takes the nature of a civil
liability ex contractu. It does not pertain to the civil action
deemed instituted with the criminal case.
In Manantan, this Court explained the effects of this result on
the civil liability deemed instituted with the criminal case. At
the risk of repetition, Manantan held that when there is no
delict, "civil liability ex delicto is out of the question, and the
civil action, if any, which may be instituted must be based on
grounds other than the delict complained of."51 In Dy's case,
the civil liability arises out of contract—a different source of
obligation apart from an act or omission punished by law—and
must be claimed in a separate civil action.
Violation of Due Process
We further note that the evidence on record never fully
established the terms of this loan contract. As the trial before
the RTC Manila was focused on proving estafa, the loan
contract was, as a consequence, only tangentially considered.
This provides another compelling reason why the civil liability
arising from the loan should be instituted in a separate civil
case. A civil action for collection of sum of money filed before
the proper court will provide for a better venue where the
terms of the loan and other relevant details may be received.
While this may postpone a warranted recovery of the civil
liability, this Court deems it more important to uphold the
principles underlying the inherent differences in the various
sources of obligations under our law, and the rule that fused
actions only refer to criminal and civil actions involving the
same act or omission. These legal tenets play a central role in
this legal system. A confusion of these principles will ultimately
jeopardize the interests of the parties involved. Actions focused
on proving estafa is not the proper vehicle to thresh out civil
liability arising from a contract.52 The Due Process Clause of
the Constitution dictates that a civil liability arising from a
contract must be litigated in a separate civil action.
Section 1 of the Bill of Rights states that no person shall be
deprived of property without due process of law. This provision
protects a person's right to both substantive and procedural
due process. Substantive due process looks into the validity of a
law and protects against arbitrariness.53 Procedural due
process, on the other hand, guarantees procedural fairness.54
It requires an ascertainment of "what process is due, when it is
due, and the degree of what is due."55 This aspect of due
process is at the heart of this case.
In general terms, procedural due process means the right to
notice and hearing.56 More specifically, our Rules of Court
provides for a set of procedures through which a person may be
notified of the claims against him or her as well as methods
through which he or she may be given the adequate
opportunity to be heard.
The Rules of Court requires that any person invoking the power
of the judiciary to protect or enforce a right or prevent or
redress a wrong57 must file an initiatory pleading which
embodies a cause of action,58 which is defined as the act or
omission by which a party violates a right of another.59 The
contents of an initiatory pleading alleging a cause of action will
vary depending on the source of the obligation involved. In the
case of an obligation arising from a contract, as in this case, the
cause of action in an initiatory pleading will involve the duties
of the parties to the contract, and what particular obligation
was breached. On the other hand, when the obligation arises
from an act or omission constituting a crime, the cause of
action must necessarily be different. In such a case, the
initiatory pleading will assert as a cause of action the act or
omission of respondent, and the specific criminal statute he or
she violated. Where the initiatory pleading fails to state a cause
of action, the respondent may file a motion to dismiss even
before trial.60 These rules embody the fundamental right to
notice under the Due Process Clause of the Constitution.
In a situation where a court (in a fused action for the
enforcement of criminal and civil liability) may validly order an
accused-respondent to pay an obligation arising from a
contract, a person's right to be notified of the complaint, and
the right to have the complaint dismissed if there is no cause of
action, are completely defeated. In this event, the accused-
respondent is completely unaware of the nature of the liability
claimed against him or her at the onset of the case. The
accused-respondent will not have read any complaint stating
the cause of action of an obligation arising from a contract. All
throughout the trial, the accused-respondent is made to
believe that should there be any civil liability awarded against
him or her, this liability is rooted from the act or omission
constituting the crime. The accused-respondent is also
deprived of the remedy of having the complaint dismissed
through a motion to dismiss before trial. In a fused action, the
accused-respondent could not have availed of this remedy
because he or she was not even given an opportunity to
ascertain what cause of action to look for in the initiatory
pleading. In such a case, the accused-respondent is blindsided.
He or she could not even have prepared the appropriate
defenses and evidence to protect his or her interest. This is not
the concept of fair play embodied in the Due Process Clause. It
is a clear violation of a person's right to due process.
The Rules of Court also allows a party to a civil action certain
remedies that enable him or her to effectively present his or her
case. A party may file a cross-claim, a counterclaim or a third-
party complaint.61 The Rules of Court prohibits these remedies
in a fused civil and criminal case.62 The Rules of Court requires
that any cross-claim, counterclaim or third-party complaint
must be instituted in a separate civil action.63 In a legal regime
where a court may order an accused in a fused action to pay
civil liability arising from a contract, the accused-respondent is
completely deprived of the remedy to file a cross-claim, a
counterclaim or a third-party complaint. This—coupled with an
accused-respondent's inability to adequately prepare his or her
defense because of lack of adequate notice of the claims
against him or her—prevents the accused-respondent from
having any right to a meaningful hearing. The right to be heard
under the Due Process Clause requires not just any kind of an
opportunity to be heard. It mandates that a party to a case
must have the chance to be heard in a real and meaningful
sense. It does not require a perfunctory hearing, but a court
proceeding where the party may adequately avail of the
procedural remedies granted to him or her. A court decision
resulting from this falls short of the mandate of the Due
Process Clause.
Indeed, the language of the Constitution is clear. No person
shall be deprived of property without due process of law. Due
Process, in its procedural sense, requires, in essence, the right
to notice and hearing. These rights are further fleshed out in
the Rules of Court. The Rules of Court enforces procedural due
process because, to repeat the words of this Court in Secretary
of Justice v. Lantion, it provides for "what process is due, when
it is due, and the degree of what is due."64 A court ordering an
accused in a fused action to pay his or her contractual liability
deprives him or her of his or her property without the right to
notice and hearing as expressed in the procedures and
remedies under the Rules of Court. Thus, any court ruling
directing an accused in a fused action to pay civil liability arising
from a contract is one that completely disregards the Due
Process Clause. This ruling must be reversed and the only upon the finality of this decision which definitively ruled
Constitution upheld. upon the principles on fused actions.

Conclusion We add, however, that upon finality of this decision,

The lower courts erred when they ordered petitioner to pay her
civil obligation arising from a contract of loan in the same
criminal case where she was acquitted on the ground that there
was no crime. Any contractual obligation she may have must
be litigated in a separate civil action involving the contract of
loan. We clarify that in cases where the accused is acquitted on
the ground that there is no crime, the civil action deemed
instituted with the criminal case cannot prosper precisely
because there is no delict from which any civil obligation may
be sourced. The peculiarity of this case is the finding that
petitioner, in fact, has an obligation arising from a contract.
This civil action arising from the contract is not necessarily
extinguished. It can be instituted in the proper court through
the proper civil action.
We note that while there is no written contract of loan in this
case, there is an oral contract of loan which must be brought
within six years.65 Under the facts of the case, it appears that
any breach in the obligation to pay the loan may have
happened between 1996 and 1999, or more than six years since
this case has been instituted. This notwithstanding, we find
that the civil action arising from the contract of loan has not yet
prescribed. Article 1150 of the Civil Code states —
Art. 1150. The time for prescription for all kinds of actions,
when there is no special provision which ordains otherwise,
shall be counted from the day they may be brought.
prospective litigants should become more circumspect in
ascertaining their course of action in similar cases. Whenever a
litigant erroneously pursues an estafa case, and the accused is
subsequently acquitted because the obligation arose out of a
contract, the prescriptive period will still be counted from the
time the cause of action arose. In this eventuality, it is probable
that the action has already prescribed by the time the criminal
case shall have been completed. This possibility demands that
prospective litigants do not haphazardly pursue the filing of an
estafa case in order to force an obligor to pay his or her
obligation with the threat of criminal conviction. It compels
litigants to be honest and fair in their judgment as to the proper
action to be filed. This ruling should deter litigants from turning
to criminal courts as their collection agents, and should provide
a disincentive to the practice of filing of criminal cases based on
unfounded grounds in order to provide a litigant a bargaining
chip in enforcing contracts.
WHEREFORE, in view of the foregoing, the Petition is
GRANTED. The Decision of the CA dated February 25, 2009 is
REVERSED. This is however, without prejudice to any civil
action which may be filed to claim civil liability arising from the
contract.
SO ORDERED.

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

bringing the action that determines the starting point for the
computation of the period of prescription.67 We highlight the
unique circumstances surrounding this case. As discussed in
this decision, there has been diverse jurisprudence as to the
propriety of ordering an accused to pay an obligation arising
from a contract in the criminal case where the accused was
acquitted on the ground that there is no crime. Litigants, such
as MCCI, cannot be blamed for relying on prior rulings where
the recovery on a contract of loan in a criminal case for estafa
was allowed. We have found the opportunity to clarify this
matter through this decision. As it is only now that we
delineate the rules governing the fusion of criminal and civil
actions pertaining to estafa, it is only upon the promulgation of
this judgment that litigants have a clear understanding of the
proper recourse in similar cases. We therefore rule that insofar PEOPLE VS CALOMIA
as MCCI is concerned, the filing of an action, if any (that may be
sourced from the contract of loan), becomes a legal possibility LEONARDO-DE CASTRO, J.:
In Criminal Case Nos. 1317 and 1318, accused-appellant Ruben
Calomia was ·charged before the Regional Trial Court (RTC) of
Loay, Bohol, Branch 50, with two counts of qualified rape of his
minor daughter, AAA,1 which he allegedly committed
sometime in August 2007 and April 2008.2
After trial on the merits, the RTC promulgated its Decision on
March 11, 2015 finding accused-appellant guilty beyond
reasonable doubt of both counts of qualified rape and
sentencing him as follows:
WHEREFORE, in the light of the foregoing evidence, the court
finds the accused guilty beyond reasonable doubt of (Qualified)
Incestuous Rape in Crim. Case No. 1317 and Statutory
Incestuous Rape in Crim. Case No. 1318.
Accordingly, in both cases, the court has no recourse but to
impose on the accused the penalties mandated by law.
Although the crimes of Qualified Incestuous Rape and
Statutory Incestuous Rape would have been punishable by
death, in view of the passage of R.A. [No.] 9346 (which
prohibits the imposition of the death penalty), the penalty
imposable for each of the two offenses is only reclusion
perpetua.
Because of the qualifying or aggravating circumstance of
relationship, the victim is entitled to civil indemnity in each
case of ₱75,000 ex delicto, ₱75,000 in moral damages (People
v. Lauga, G.R. No. 186228, Mar. 15, 2010), and ₱30,000 in
exemplary damages (ibid.).3
Accused-appellant's appeal before the Court of Appeals was
docketed as CA-G.R. CEB-CR-HC No. 02040. In its Decision
dated August 26, 2016, the appellate court upheld accused-
appellant's conviction, but modified the award of damages to
AAA. The Court of Appeals decreed:
WHEREFORE, in view of the foregoing, We find no error
committed by the Trial Court and, hence, DENY the appeal.
The Decision dated 11 March 2015 rendered by the Regional
Trial Court of Loay, Bohol 7th Judicial Region, Branch 50, in
Criminal Case Nos. 1317 and 1318, is AFFIRMED with
MODIFICATION.
As modified, [accused-]appellant Ruben Calomia is ordered to
pay the victim AAA the amounts of ₱l00,000.00 as civil
indemnity, ₱l00,000.001 as moral damages, and ₱l00,000.00
as exemplary damages. Interest is imposed on all damages
awarded at the rate of 6% per annum from date of finality of
this Decision until fully paid.4
On September 21, 2016, accused-appellant filed his Notice of
Appeal expressing his intention to appeal the foregoing
Decision before this Court.
The Court issued a Resolution dated April 25, 2017 requiring the
parties to file their respective supplemental briefs, if they so
desired, within 30 days from notice; ordering the Provincial Jail
Warden, Bohol Detention and Rehabilitation Center,
Tagbilaran City, to transfer accused-appellant to the Bureau of
Corrections, Muntinlupa City and to submit a report of such
transfer; and ordering the Director General of the Bureau of
Corrections to confirm the confinement of accused-appellant
to said prison and submit a report thereon.
However, the Court received on September 4, 201 7 a letter
dated August 2, 2017 from Jail Chief Inspector (J/CINSP) Felipe
A. Montejo (Montejo), DDM, Bohol District Jail Warden, stating
thus:
Please be informed that the said appellant [has] died while in
the confinement of Bohol District Jail last Sept. 29, 2015 due to
Asphyxia due to Strangulation, Self Inflicted, Hanging and
declared dead by Dr. Calvelo, Medical Officer III, City Health
Office, Tagbilaran City, Bohol per Certificate of Death from
Local Civil Registrar.
Accused Ruben Calomia was due for transfer at BUCOR
Muntinlupa City at that time pending the approval of budget
but unfortunately he died with the aforementioned cause of
death before the scheduled date and time to transfer.5
Attached to J/CINSP Montejo's letter is a copy of accused-
appellant's Death Certificate issued by the Office of the Civil
Registrar General indicating that accused-appellant died on
September 29, 2015 in Cabawan District, Tagbilaran City,
Bohol, of "Asphyxia due to Strangulation, Self Inflicted,
Hanging."
Paragraph 1 of Article 89 of the Revised Penal Code, as
amended, provides that the death of an accused pending his
appeal extinguishes both his criminal and civil liability ex
delicto, thus:
Art. 89. How criminal liability is totally extinguished. - Criminal
liability is totally extinguished:
1. By the death of the convict, as to the personal penalties; and
as to pecuniary penalties, liability therefore is extinguished only
when the death of the offender occurs before final judgment[.]
In People v. Bayotas,6 the Court construed the above provision
and pronounced these guidelines:
1. Death of the accused pending appeal of his conviction
extinguishes his criminal liability as well as the civil liability
based solely thereon. As opined by Justice Regalado, in this
regard, "the death of the accused prior to final judgment
terminates his criminal liability and only the civil liability
directly arising from and based solely on the offense
committed, i.e., civil liability ex delicto in senso strictiore."
2. Corollarily, the claim for civil liability survives
notwithstanding the death of accused, if the same may also be
predicated on a source of obligation other than delict. Article
1157 of the Civil Code enumerates these other sources of
obligation from which the civil liability may arise as a result of
the same act or omission:
a) Law
b) Contracts
c) Quasi-contract
d) xxx
e) Quasi-delicts
3. Where the civil liability survives, as explained in Number 2
above, an action for recovery therefor may be pursued but only
by way of filing a separate civil action and subject to Section 1,
Rule 111 of the 1985 Rules on Criminal Procedure as amended.
This separate civil action may be enforced either against the
executor/administrator or the estate of the accused, depending
on the source of obligation upon which the same is based as
explained above.
4. Finally, the private offended party need not fear a forfeiture
of his right to file this separate civil action by prescription, in
cases where during the prosecution of the criminal action and
prior to its extinction, the private-offended party instituted
together therewith the civil action. In such case, the statute of
limitations on the civil liability is deemed interrupted during the
pendency of the criminal case, conformably with provisions of
Article 1155 of the Civil Code, that should thereby avoid any
apprehension on a possible privation of right by prescription.
(Emphases supplied.)
The death of an accused pending the appeal of his conviction
extinguishes the criminal action, as there is no longer a
defendant to stand as the accused; and the civil action
instituted therein for the recovery of civil liability ex delicto is
likewise ipso facto extinguished, as it is grounded on the
criminal action.7
In the instant case, accused-appellant's death occurred prior to
the finality of the judgment of conviction rendered against
him.1âwphi1 In fact, accused-appellant died way back on
September 29, 2015, during the pendency of his appeal before
the Court of Appeals. Unfortunately, the appellate court was
not timely inf9rmed of accused-appellant's death prior to the
promulgation of its Decision in CA-G.R. CEB-CR-HC No. 02040
on August 26, 2016.

Irrefragably, accused-appellant's death extinguished his

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

WHEREFORE, the Court RESOLVES to SET ASIDE the Decision

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

SO ORDERED.

PREJUDICIAL QUESTION, ELEMENTS

TUANDA VS SANDIGANBAYAN

KAPUNAN, J.:
Petitioners institute this special civil action for certiorari and
prohibition under Rule 65 of the Revised Rules of Court to set
aside the resolution of the Sandiganbayan dated 17 February
1992 and its orders dated 19 August 1992 and 13 May 1993 in
Criminal Case No. 16936 entitled "People of the Philippines
versus Reynaldo Tuanda, et al." denying petitioners' motion for
suspension of their arraignment.
The present controversy arose from the following antecedents:
On 9 February 1989, private respondents Delia Estrellanes and
Bartolome Binaohan were designated as industrial labor
sectoral representative and agricultural labor sectoral
representative respectively, for the Sangguniang Bayan of
Jimalalud, Province of Negros Oriental by then Secretary Luis
T. Santos of the Department of Local Government. Private
respondents Binaohan and Estrellanes took their oath of office
on 16 February 1989 and 17 February 1989, respectively.
Subsequently, petitioners filed an undated petition with the
Office of the President for review and recall of said
designations. The latter, however, in a letter dated 20 March
1989, denied the petition and enjoined Mayor Reynaldo Tuanda
to recognize private respondents as sectoral representatives.
On 4 May 1990, private respondents filed a petition for
mandamus with the Regional Trial Court of Negros Oriental,
Branch 35, docketed as Special Civil Action No. 9661, for
recognition as members of the Sangguniang Bayan. It was
dismissed on 23 July 1991.
Thereafter, on 20 June 1991, petitioners filed an action with the
Regional Trial Court of Dumaguete City to declare null and void
the designations of private respondents as sectoral
representatives, docketed as Civil Case No. 9955 entitled
"Reynaldo Tuanda, et al. versus Secretary of the Department of
Local Government, et al."
On 21 July 1991, an information was filed before the
Sandiganbayan, docketed as Criminal Case No. 16936 entitled
"People of the Philippines versus Reynaldo Tuanda, et al."
charging petitioners thus:
INFORMATION
The undersigned Special Prosecution Officer of the Special
Prosecutor, hereby accuses REYNALDO V. TUANDA,
HERMENEGILDO G. FABURADA, MANUEL LIM, NICANOR P.
AGOSTO, ERENIETA K. MENDOZA, MAXIMO VIERNES,
HACUBINA V. SERILLO, and SANTOS A. VILLANUEVA of
Violation of Section 3(e) of R.A. No. 3019, as amended,
committed as follows:
That during the period from February 1989 to February 1991
and subsequent thereto, in the Municipality of Jimalalud,
Negros Oriental, and within the jurisdiction of this Honorable
Court, accused, all public officers, Mayor REYNALDO V.
TUANDA, Vice-Mayor HERMENEGILDO G. FABURADA,
Sangguniang Members MANUEL LIM, NICANOR P. AGOSTO,
ERENIETA K. MENDOZA, MAXIMO A. VIERNES, HACUBINA V.
SERILLO, ILUMINADO D. ESTRELLANES and SANTOS A.
VILLANUEVA while in the performance of their official
functions and taking advantage of their public positions, with
evident bad faith, manifest partiality, and conspiring and
confederating with each other did, then and there, wilfully and
unlawfully cause undue injury to Sectoral Members Bartolome
M. Binaohan and Delia T. Estrellanes by refusing to pay despite
demand the amount of NINETY FIVE THOUSAND THREE
HUNDRED FIFTY PESOS (P95,350.00) and ONE HUNDRED
EIGHT THOUSAND NINE HUNDRED PESOS (P108,900.00)
representing respectively their per diems, salaries and other
privileges and benefits, and such undue injury continuing to the
present to the prejudice and damage of Bartolome Binaohan
and Delia Estrellanes.
CONTRARY TO LAW.
On 9 September 1991, petitioners filed a motion with the
Sandiganbayan for suspension of the proceedings in Criminal
Case No. 16936 on the ground that a prejudicial question exists
in Civil Case No. 9955 pending before the Regional Trial Court
of Dumaguete City.2
On 16 January 1992, the Regional Trial Court rendered a
decision declaring null and void ab initio the designations
issued by the Department of Local Government to the private
respondents as sectoral representatives for having been done
in violation of Section 146 (2) of B.P. Blg. 337, otherwise known
as the Local Government Code.3
The trial court expounded thus:
The Supreme Court in the case of Johnny D. Supangan Jr. v.
Luis T. Santos, et al., G.R. No. 84663, along with 7 companion
cases of similar import, (G.R. Nos. 05012, 87601, 87602, 87792,
87935, 88072, and 90205) all promulgated on August 24, 1990,
ruled that:
B.P. Blg. 337 explicitly required that before the President (or the
Secretary of the Department of Local Government) may
appoint members of the local legislative bodies to represent
the Industrial and Agricultural Labor Sectors, there must be a
determination to be made by the Sanggunian itself that the
said sectors are of sufficient number in the city or municipality
to warrant representation after consultation with associations
and persons belonging to the sector concerned.
The Supreme Court further ruled
For that matter, the Implementing Rules and Regulations of the
Local Government Code even prescribe the time and manner
by which such determination is to be conducted by the
Sanggunian.
Consequently, in cases where the Sanggunian concerned has
not yet determined that the Industrial and Agricultural Labor
Sectors in their particular city or municipality are of sufficient
number to warrant representation, there will absolutely be no
basis for the designation/appointments.
In the process of such inquiry as to the sufficiency in number of
the sector concerned to warrant representation, the
Sanggunian is enjoined by law (B.P. Blg. 337) to consult with
associations and persons belonging to the sector concerned.
Consultation with the sector concerned is made a pre-requisite.
This is so considering that those who belong to the said sector
are the ones primarily interested in being represented in the
Sanggunian. In the same aforecited case, the Supreme Court
considers such prior determination by the Sanggunian itself
(not by any other person or body) as a condition sine qua non to
a valid appointment or designation.
Since in the present case, there was total absence of the
required prior determination by the Sangguniang Bayan of
Jimalalud, this Court cannot help but declare the designations
of private defendants as sectoral representatives null and void.
This verdict is not without precedence. In several similar cases,
the Supreme Court invariably nullified the designations where
the requirements of Sec. 146 (2), B.P. Blg. 337 were not
complied with. Just to cite one case, the Supreme Court ruled:
There is no certification from the Sangguniang Bayan of
Valenzuela that the sectors concerned are of sufficient number
to warrant representation and there was no consultation
whatsoever with the associations and persons belonging to the
Industrial and Agricultural Labor Sectors. Therefore, the
appointment of private respondents Romeo F. Bularan and
Rafael Cortez are null and void (Romeo Llanado, et al. v. Hon.
Luis Santos, et al., G.R. No. 86394, August 24, 1990).
Private respondents appealed the aforestated decision to the
Court of Appeals, docketed as CA-G.R. CV No. 36769, where
the same is currently pending resolution.
Meanwhile, on 17 February 1992, respondent Sandiganbayan
issued a resolution denying the motion for suspension of
proceedings filed by petitioners. Said respondent
Sandiganbayan:
Despite the pendency of Civil Case No. 9955 of the Regional
Trial Court of Negros Oriental, it appears, nevertheless, that
the private complainants have been rendering services on the
basis of their respective appointments as sectoral members of
the Sangguniang Bayan of the Municipality of Jimalalud,
Negros Oriental; and that their said appointments enjoy the
presumption of regularity. Having rendered such services, the
private complainants are entitled to the salaries attached to
their office. Even assuming arguendo that the said Regional
Trial Court shall later decide that the said appointments of the
private complainants are null and void, still the private
complainants are entitled to their salaries and compensation
for service they have actually rendered, for the reason that
before such judicial declaration of nullity, the private
complainants are considered at least de facto public officers
acting as such on the basis of apparently valid appointments
issued by competent authorities. In other words, regardless of
the decision that may be rendered in Civil Case
No. 9955, the private complainants are entitled to their
withheld salaries for the services they have actually rendered as
sectoral representatives of the said Sangguniang Bayan.
Hence, the decision that may be rendered by the Regional Trial
Court in Civil Case No. 9955 would not be determinative of the
innocence or guilt of the accused.
WHEREFORE, the subject Petition for the Suspension of
Proceedings in Virtue of Prejudicial Question filed by the
accused through counsel, is hereby DENIED for lack of merit.
SO ORDERED.5
Petitioners filed a motion for reconsideration of the
aforementioned resolution in view of the decision promulgated
by the trial court nullifying the appointments of private
respondents but it was, likewise, denied in an order issued by
respondent Sandiganbayan on 19 August 1992 on the
justification that the grounds stated in the said motion were a
mere rehash of petitioners' original motion to hold the case in
abeyance.6 The dispositive portion of its order reads as follows:
WHEREFORE, in view of the foregoing, the arraignment of the
accused which was scheduled today is cancelled. Mayor
Reynaldo Tuanda, Hermenegildo Faburada, Nicanor P. Agosto,
Erenieta K. Mendoza, Hacubina V. Serillo and Iluminado
Estrellanes are, however, hereby ordered to show cause in
writing within ten (10) days from service hereof why they
should not be cited for contempt of court for their failure to
appear in court today for arraignment.
In case of an adverse resolution on the motion to quash which is
to be filed by the counsel for the defense, set this case for
arraignment, pre-trial and trial on January 4 & 5, 1993, on all
dates the trial to start at 8:30 o'clock in the morning.
SO ORDERED.7
On 19 February 1993, respondent Sandiganbayan issued an
order holding consideration of all incidents pending the
issuance of an extended resolution.8
No such resolution, however, was issued and in its assailed
order dated 13 May 1992, respondent Sandiganbayan set the
arraignment of petitioners on 30 June 1993. The dispositive
portion of the order reads:
WHEREFORE, considering the absence of the accused from the
scheduled hearing today which We deem to be excusable, reset
this case for arraignment on June 30, 1993 and for trial on the
merits on June 30 and July 1 and 2, 1993, on all dates the trial to
start at 8:30 o'clock in the morning.
Give proper notice to the accused and principal counsel, Atty.
Alfonso Briones. Considering that the accused come all the way
from Himalalud, Negros Oriental, no postponement will be
allowed.
SO ORDERED.9
Hence, this special civil action for certiorari and prohibition
where petitioners attribute to respondent Sandiganbayan the
following errors:
A. The Respondent Court committed grave abuse of discretion
in denying petitioners' motions for the suspension of the
proceedings in Criminal Case No. 16936 in spite of the
pendency of a prejudicial issue before the Court of Appeals in
CA-G.R. CV No. 36769;
B. The Respondent Court acted without or in excess of
jurisdiction in refusing to suspend the proceedings that would
entail a retrial and rehearing by it of the basic issue involved,
i.e., the validity of the appointments of private respondents
and their entitlement to compensation which is already
pending resolution by the Court of Appeals in C.A. G.R. CV No.
36769; and
C. The Respondent Court committed grave abuse of discretion
and/or acted without or in excess of jurisdiction in effectively
allowing petitioners to be prosecuted under two alternative
theories that private respondents are de jure and/or de facto
officers in violation of petitioners' right to due process.10
In sum, the only issue in the case at bench is whether or not the
legality or validity of private respondents' designation as
sectoral representatives which is pending resolution in CA-G.R.
No. 36769 is a prejudicial question justifying suspension of the
proceedings in the criminal case against petitioners.
A prejudicial question is one that must be decided before any
criminal prosecution may be instituted or before it may
proceed (see Art. 36, Civil Code) because a decision on that
point is vital to the eventual judgment in the criminal case.
Thus, the resolution of the prejudicial question is a logical
antecedent of the issues involved in said criminal case.11
A prejudicial question is defined as that which arises in a case
the resolution of which is a logical antecedent of the issue
involved therein, and the cognizance of which pertains to
another tribunal. The prejudicial question must be
determinative of the case before the court but the jurisdiction
to try and resolve the question must be lodged in another court
or tribunal.12 It is a question based on a fact distinct and
separate from "the crime but so intimately connected with it
that it determines the guilt or innocence of the accused, and for
it to suspend the criminal action, it must appear not only that
said case involves facts intimately related to those upon which
the criminal prosecution would be based but also that in the
resolution of the issue or issues raised in the civil case, the guilt
or innocence of the accused would necessarily be determined.
It comes into play generally in a situation where a civil action
and a criminal action are both pending and there exists in the
former an issue which must be preemptively resolved before
the criminal action may proceed, because howsoever the issue
raised in the civil action is resolved would be determinative juris
et de jure of the guilt or innocence of the accused in the
criminal case."13
The rationale behind the principle of prejudicial question is to
avoid two conflicting decisions.14 It has two essential
elements:
(a) the civil action involves an issue similar or intimately related
to the issue raised in the criminal action; and
(b) the resolution of such issue determines whether or not the
criminal action may proceed.15
Applying the foregoing principles to the case at bench, we find
that the issue in the civil case, CA-G.R. CV No. 36769,
constitutes a valid prejudicial question to warrant suspension of
the arraignment and further proceedings in the criminal case
against petitioners.
All the elements of a prejudicial question are clearly and
unmistakably present in this case. There is no doubt that the
facts and issues involved in the civil action (No. 36769) and the
criminal case (No. 16936) are closely related. The filing of the
criminal case was premised on petitioners' alleged partiality
and evident bad faith in not paying private respondents'
salaries and per diems as sectoral representatives, while the
civil action was instituted precisely to resolve whether or not
the designations of private respondents as sectoral
representatives were made in accordance with law.
More importantly, ,the resolution of the civil case will certainly
determine if there will still be any reason to proceed with the
criminal action.
Petitioners were criminally charged under the Anti-Graft &
Corrupt Practices Act (RA 3019, sec, 3[e]) due to their refusal,
allegedly in bad faith and with manifest partiality, to pay
private respondents' salaries as sectoral representatives. This
refusal, however, was anchored on petitioners' assertion that
said designations were made in violation of the Local
Government Code (B.P. Blg. 337) and thus, were null and void.
Therefore, should the Court of Appeals uphold the trial court's
decision declaring null and void private respondents'
designations as sectoral representatives for failure to comply
with the provisions of the Local Government Code (B.P. Blg.
337, sec. 146[2]), the charges against petitioners would no
longer, so to speak, have a leg to stand on. Petitioners cannot
be accused of bad faith and partiality there being in the first
place no obligation on their part to pay private respondents'
claims. Private respondents do not have any legal right to
demand salaries, per diems and other benefits. In other words,
the Court of Appeals' resolution of the issues raised in the civil
action will ultimately determine whether or not there is basis to
proceed with the criminal case.
Private respondents insist that even if their designations are
nullified, they are entitled to compensation for actual services
rendered.16 We disagree. As found by the trial court and as
borne out by the records, from the start, private respondents'
designations as sectoral representatives have been challenged
by petitioners. They began with a petition filed with the Office
of the President copies of which were received by private
respondents on 26 February 1989, barely eight (8) days after
they took their oath of office.17 Hence, private respondents'
claim that they have actually rendered services as sectoral
representatives has not been established.
Finally, we find unmeritorious respondent Sandiganbayan's
thesis that even in the event that private respondents'
designations are finally declared invalid, they may still be
considered de facto public officers entitled to compensation for
services actually rendered.
The conditions and elements of de facto officership are the
following:
1) There must be a de jure office;
2) There must be color of right or general acquiescence
by the public; and
3) There must be actual physical possession of the office
in good faith.18
One can qualify as a de facto officer only if all the aforestated
elements are present. There can be no de facto officer where
there is no de jure office, although there may be a de facto
officer in a de jure office.19
WHEREFORE, the resolution dated 17 February 1992 and
orders dated 19 August 1992 and 13 May 1993 of respondent
Sandiganbayan in Criminal Case No. 16936 are hereby SET
ASIDE. Respondent Sandiganbayan is enjoined from
proceeding with the arraignment and trial of petitioners in
Criminal Case No. 16936 pending final resolution of CA-G.R. CV
No. 36769.
SO ORDERED.
BELTRAN VS PEOPLE
BUENA, J.:
This petition for review, filed under Rule 45 of the 1997 Rules of
Civil Procedure, seeks to review and set aside the Order dated
January 28, 1999 issued by Judge Florentino A. Tuazon, Jr. of
the Regional Trial Court of Makati City, Branch 139 in Special
Civil Case No. 98-3056, entitled "Meynardo Beltran vs. People
of the Philippines and Hon. Judge Alden Cervantes of the
Metropolitan Trial Court of Makati City, Branch 61." The said
Order denied petitioner's prayer for the issuance of a writ of
preliminary injunction to enjoin Judge Cervantes from
proceeding with the trial of Criminal Case No. 236176, a
concubinage case against petitioner on the ground that the
pending petition for declaration of nullity of marriage filed by
petitioner against his wife constitutes a prejudicial question.
The antecedent facts of the case are undisputed:
Petitioner Meynardo Beltran and wife Charmaine E. Felix were
married on June 16, 1973 at the Immaculate Concepcion Parish
Church in Cubao, Quezon City.1
On February 7, 1997, after twenty-four years of marriage and
four children,2 petitioner filed a petition for nullity of marriage
on the ground of psychological incapacity under Article 36 of
the Family Code before Branch 87 of the Regional Trial Court of
Quezon City. The case was docketed as Civil Case No. Q-97-
30192.3
In her Answer to the said petition, petitioner's wife Charmaine
Felix alleged that it was petitioner who abandoned the conjugal
home and lived with a certain woman named Milagros Salting.4
Charmaine subsequently filed a criminal complaint for
concubinage5 under Article 334 of the Revised Penal Code
against petitioner and his paramour before the City
Prosecutor's Office of Makati who, in a Resolution dated
September 16, 1997, found probable cause and ordered the
filing of an Information6 against them. The case, docketed as
Criminal Case No. 236176, was filed before the Metropolitan
Trial Court of Makati City, Branch 61.1awphi1
On March 20, 1998, petitioner, in order to forestall the issuance
of a warrant for his arrest, filed a Motion to Defer Proceedings
Including the Issuance of the Warrant of Arrest in the criminal
case. Petitioner argued that the pendency of the civil case for
declaration of nullity of his marriage posed a prejudicial
question to the determination of the criminal case. Judge Alden
Vasquez Cervantes denied the foregoing motion in the Order7
dated August 31, 1998. Petitioner's motion for reconsideration
of the said Order of denial was likewise denied in an Order
dated December 9, 1998.
In view of the denial of his motion to defer the proceedings in
the concubinage case, petitioner went to the Regional Trial
Court of Makati City, Branch 139 on certiorari, questioning the
Orders dated August 31, 1998 and December 9, 1998 issued by
Judge Cervantes and praying for the issuance of a writ of
preliminary injunction.8 In an Order9 dated January 28, 1999,
the Regional Trial Court of Makati denied the petition for
certiorari. Said Court subsequently issued another Order 10
dated February 23, 1999, denying his motion for
reconsideration of the dismissal of his petition.
Undaunted, petitioner filed the instant petition for review.
Petitioner contends that the pendency of the petition for
declaration of nullity of his marriage based on psychological
incapacity under Article 36 of the Family Code is a prejudicial
question that should merit the suspension of the criminal case
for concubinage filed against him by his wife.
Petitioner also contends that there is a possibility that two
conflicting decisions might result from the civil case for
annulment of marriage and the criminal case for concubinage.
In the civil case, the trial court might declare the marriage as
valid by dismissing petitioner's complaint but in the criminal
case, the trial court might acquit petitioner because the
evidence shows that his marriage is void on ground of
psychological incapacity. Petitioner submits that the possible
conflict of the courts' ruling regarding petitioner's marriage can
be avoided, if the criminal case will be suspended, until the
court rules on the validity of marriage; that if petitioner's
marriage is declared void by reason of psychological incapacity
then by reason of the arguments submitted in the subject
petition, his marriage has never existed; and that, accordingly,
petitioner could not be convicted in the criminal case because
he was never before a married man.
Petitioner's contentions are untenable.
The rationale behind the principle of prejudicial question is to
avoid two conflicting decisions. It has two essential elements:
(a) the civil action involves an issue similar or intimately related
to the issue raised in the criminal action; and (b) the resolution
of such issue determines whether or not the criminal action
may proceed. 11
The pendency of the case for declaration of nullity of
petitioner's marriage is not a prejudicial question to the
concubinage case. For a civil case to be considered prejudicial
to a criminal action as to cause the suspension of the latter
pending the final determination of the civil case, it must appear
not only that the said civil case involves the same facts upon
which the criminal prosecution would be based, but also that in
the resolution of the issue or issues raised in the aforesaid civil
action, the guilt or innocence of the accused would necessarily
be determined.
Art. 40 of the Family Code provides:
The absolute nullity of a previous marriage may be invoked for
purposes of remarriage on the basis solely of a final judgment
declaring such previous marriage void.
In Domingo vs. Court of Appeals, 12 this Court ruled that the
import of said provision is that for purposes of remarriage, the
only legally acceptable basis for declaring a previous marriage
an absolute nullity is a final judgment declaring such previous
marriage void, whereas, for purposes of other than remarriage,
other evidence is acceptable. The pertinent portions of said
Decision read:
. . . Undoubtedly, one can conceive of other instances where a
party might well invoke the absolute nullity of a previous
marriage for purposes other than remarriage, such as in case of
an action for liquidation, partition, distribution and separation
of property between the erstwhile spouses, as well as an action
for the custody and support of their common children and the
delivery of the latters' presumptive legitimes. In such cases,
evidence needs must be adduced, testimonial or documentary,
to prove the existence of grounds rendering such a previous
marriage an absolute nullity. These needs not be limited solely
to an earlier final judgment of a court declaring such previous
marriage void.
So that in a case for concubinage, the accused, like the herein
petitioner need not present a final judgment declaring his
marriage void for he can adduce evidence in the criminal case
of the nullity of his marriage other than proof of a final
judgment declaring his marriage void.
With regard to petitioner's argument that he could be acquitted
of the charge of concubinage should his marriage be declared
null and void, suffice it to state that even a subsequent
pronouncement that his marriage is void from the beginning is
not a defense.
Analogous to this case is that of Landicho vs. Relova 1 cited in
Donato vs. Luna 14 where this Court held that:
. . . Assuming that the first marriage was null and void on the
ground alleged by petitioner, that fact would not be material to
the outcome of the criminal case. Parties to the marriage
should not be permitted to judge for themselves its nullity, for
the same must be submitted to the judgment of the competent
courts and only when the nullity of the marriage is so declared
can it be held as void, and so long as there is no such
declaration the presumption is that the marriage exists.
Therefore, he who contracts a second marriage before the
judicial declaration of nullity of the first marriage assumes the
risk of being prosecuted for bigamy.

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

WHEREFORE, for lack of merit, the instant petition is

DISMISSED.

SO ORDERED.

PASI VS LICHAUCO

CARPIO MORALES, J.:

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

4. By absolute pardon

5. By prescription of the crime;

6. By prescription of the penalty;

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

Article 344 of this Code. (Underscoring supplied)

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

reclusion perpetua or reclusion temporal shall prescribe in
twenty years.

Crimes punishable by other afflictive penalties shall prescribe in

fifteen years.

Those punishable by a correctional penalty shall prescribe in

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

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

year

The offenses of oral defamation and slander by deed shall

prescribe in six months.

Light offenses prescribe in two months.

When the penalty fixed by law is a compound one, the highest

penalty shall be made the basis of the application of the rules
contained in the first, second, and third paragraphs of this
article. x x x

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

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

WHEREFORE, the Order dated July 17, 1998 of respondent PERALTA, J.:
Ombudsman dismissing OMB Case No. 0-98-0416 against
This is a petition for review on certiorari under Rule 45 of the
Rules of Court with prayer for the issuance of a writ of
preliminary injunction and/or issuance of status quo order
seeking to annul and set aside the Resolution1 of the Court of
Appeals (CA) dated July 17, 2003 denying petitioner's motion
for reconsideration of the Decision2 dated April 30, 2003 in CA-
G.R. SP No. 68250.
The facts of the case are as follows:
Petitioner Jesse Y. Yap and his spouse Bessie Yap are engaged
in the real estate business through their company Primetown
Property Group.
Sometime in 1996, petitioner purchased several real properties
from a certain Evelyn Te (Evelyn). In consideration of said
purchases, petitioner issued several Bank of the Philippine
Islands (BPI) postdated checks to Evelyn. Thereafter, spouses
Orlando and Mergyl Mirabueno and spouses Charlie and Jovita
Dimalanta, rediscounted the checks from Evelyn.
In the beginning, the first few checks were honored by the
bank, but in the early part of 1997, when the remaining checks
were deposited with the drawee bank, they were dishonored
for the reason that the "Account is Closed." Demands were
made by Spouses Mirabueno and Spouses Dimalanta to the
petitioner to make good the checks. Despite this, however, the
latter failed to pay the amounts represented by the said checks.
On December 8, 1997, Spouses Mirabueno filed a civil action for
collection of sum of money, damages and attorney's fee with
prayer for the issuance of a writ of preliminary attachment
against petitioner before the Regional Trial Court (RTC) of
General Santos City, docketed as Civil Case No. 6231.3 On
December 15, 1997, Spouses Dimalanta followed suit and
instituted a similar action, which was docketed as Civil Case No.
6238.4
Subsequently, on various dates, the Office of the City
Prosecutor of General Santos City filed several informations for
violation of Batas Pambansa Bilang (B.P. Blg.) 22 against the
petitioner with the Municipal Trial Court in Cities (MTCC),
General Santos City. The criminal complaints were docketed as
Criminal Case Nos. 34873, 34874, 34862 to 34869, and Criminal
Case No. 35522-I.5
In the criminal cases, petitioner filed separate motions to
suspend proceedings on account of the existence of a
prejudicial question and motion to exclude the private
prosecutor from participating in the proceedings.6 Petitioner
prayed that the proceedings in the criminal cases be suspended
until the civil cases pending before the RTC were finally
resolved.
The MTCC, in its Orders7 dated June 21, 2000 and July 4, 2000,
denied the motions for lack of merit. Petitioner filed a Partial
Motion for Reconsideration8 relative to Criminal Case Nos.
34873, 34874, 34862 to 34869 and a Motion for Reconsideration
of the Part of the Order Denying the Motion to Suspend
Proceedings on Account of the Existence of a Prejudicial
Question relative to Criminal Case No. 35522-I.9 The
subsequent motions were denied in the Order10 dated October
18, 2000.
Aggrieved, petitioner filed a Petition for Certiorari with a Prayer
for the Issuance of a Writ of Preliminary Injunction11 before the
RTC, docketed as SPL. Civil Case No. 539, imputing grave abuse
of discretion on the part of the MTCC Judge. On July 2, 2001,
the RTC issued an Order12 denying the petition.
Petitioner then filed a Motion for Reconsideration,13 which was
denied in an Order dated October 18, 2001.14
Thereafter, petitioner filed with the CA a Petition for Certiorari
Prohibition and Mandamus with Urgent Prayer for the Issuance
of Status Quo Order and Writ of Preliminary Injunction,15
docketed as CA-G.R. SP No. 68250.
On April 30, 2003, the CA rendered a Decision16 dismissing the
petition for lack of merit. The CA opined that Civil Case Nos.
6231 and 6238 did not pose a prejudicial question to the
prosecution of the petitioner for violation of B.P. Blg. 22.
The CA ruled
In the instant case, a careful perusal of Civil Cases Nos. 6231
and 6238 reveals that the issue involved therein is not the
validity of the sale as incorrectly pointed out by the petitioner,
but it is, whether or not the complainants therein are entitled
to collect from the petitioner the sum or the value of the checks
which they have rediscounted from Evelyn Te. It behooves this
Court to state that the sale and the rediscounting of the checks
are two transactions, separate and distinct from each other. It
so happened that in the subject civil cases it is not the sale that
is in question, but rather the rediscounting of the checks.
Therefore, petitioner's contention that the main issue involved
in said civil cases is the validity of the sale stands on hollow
ground. Furthermore, if it is indeed the validity of the sale that
is contested in the subject civil cases, then, We cannot fathom
why the petitioner never contested such sale by filing an action
for the annulment thereof or at least invoked or prayed in his
answer that the sale be declared null and void. Accordingly,
even if Civil Cases Nos. 6231 and 6238 are tried and the
resolution of the issues therein is had, it cannot be deduced
therefrom that the petitioner cannot be held liable anymore for
violation of B.P. Blg. 22.17
Petitioner filed a Motion for Reconsideration,18 which was
denied in the Order19 dated July 17, 2003.
Hence, the petition assigning the following errors:
1. THE HONORABLE COURT OF APPEALS ERRED IN RULING
THAT THERE IS NO PREJUDICIAL QUESTION IN THE CIVIL
CASES (FOR COLLECTION OF SUMS OF MONEY INSTITUTED
BY PRIVATE RESPONDENTS OVER CHECKS ISSUED BY THE
PETITIONER, CIVIL CASE NOS. 6238 AND 6231) THAT WOULD
WARRANT SUSPENSION OF THE CRIMINAL CASES (CASE
NO. 35522-1, FOR VIOLATION OF B.P. 22, SUBJECT OF
WHICH ARE THE VERY SAME CHECKS).
2. THE HONORABLE COURT OF APPEALS ERRED IN NOT
GRANTING THE PRAYER FOR THE ISSUANCE OF A WRIT OF
PRELIMINARY INJUNCTION AND/OR STATUS QUO
ORDER.20
The main contention of the petitioner is that a prejudicial
question, as defined by law and jurisprudence, exists in the
present case. It is the petitioner's assertion that Civil Case Nos.
6231 and 6238 for collection of sum of money and damages
were filed ahead of the criminal cases for violation of B.P. Blg.
22. He further alleged that, in the pending civil cases, the issue
as to whether private respondents are entitled to collect from
the petitioner despite the lack of consideration, is an issue that
is a logical antecedent to the criminal cases for violation of B.P.
Blg. 22. For if the court rules that there is no valid consideration
for the check's issuance, as petitioner contends, then it
necessarily follows that he could not also be held liable for
violation of B.P. Blg. 22.
Petitioner further avers that B.P. Blg. 22 specifically requires,
among other elements, that the check should have been issued
for account or for value. There must be a valid consideration;
otherwise, no violation of the said law could be rightfully
pursued. Petitioner said that the reason for the dishonor of the
checks was his order to the drawee bank to stop payment and
to close his account in order to avoid necessary penalty from
the bank. He made this order due to the failure of Evelyn to
deliver to him the titles to the purchased properties to him.
On the other hand, the Office of the Solicitor General (OSG)
contends that there is no prejudicial question in Civil Case Nos.
6231 and 6238 which would warrant the suspension of the
proceedings in the criminal cases for violation of B.P. Blg. 22
against the petitioner. The issue in the civil cases is not the
validity of the sale between the petitioner and Evelyn, but
whether the complainants therein are entitled to damages
arising from the checks. These checks were issued by the
petitioner in favor of Evelyn, who, thereafter, negotiated the
same checks to private complainants. The checks were
subsequently dishonored due to insufficiency of funds. The
OSG maintains that the resolution of such issue has absolutely
no bearing on the issue of whether petitioner may be held liable
for violation of B.P. Blg. 22.21
The present case hinges on the determination of whether there
exists a prejudicial question that necessitates the suspension of
the proceedings in the MTCC.
We find that there is none and, thus, we resolve to deny the
petition.
A prejudicial question generally exists in a situation where a
civil action and a criminal action are both pending, and there
exists in the former an issue that must be preemptively
resolved before the latter may proceed, because howsoever the
issue raised in the civil action is resolved would be
determinative juris et de jure of the guilt or innocence of the
accused in the criminal case. The rationale behind the principle
of prejudicial question is to avoid two conflicting decisions. It
has two essential elements: (i) the civil action involves an issue
similar or intimately related to the issue raised in the criminal
action; and (ii) the resolution of such issue determines whether
or not the criminal action may proceed.22
If both civil and criminal cases have similar issues, or the issue in
one is intimately related to the issues raised in the other, then a
prejudicial question would likely exist, provided the other
element or characteristic is satisfied. It must appear not only
that the civil case involves the same facts upon which the
criminal prosecution would be based, but also that the
resolution of the issues raised in the civil action would be
necessarily determinative of the guilt or innocence of the
accused. If the resolution of the issue in the civil action will not
determine the criminal responsibility of the accused in the
criminal action based on the same facts, or if there is no
necessity that the civil case be determined first before taking
up the criminal case, the civil case does not involve a prejudicial
question.23 Neither is there a prejudicial question if the civil
and the criminal action can, according to law, proceed
independently of each other.24
The issue in the criminal cases is whether the petitioner is guilty
of violating B.P. Blg. 22, while in the civil case, it is whether the
private respondents are entitled to collect from the petitioner
the sum or the value of the checks that they have rediscounted
from Evelyn.lavvphil
The resolution of the issue raised in the civil action is not
determinative of the guilt or innocence of the accused in the
criminal cases against him, and there is no necessity that the
civil case be determined first before taking up the criminal
cases.
In the aforementioned civil actions, even if petitioner is
declared not liable for the payment of the value of the checks
and damages, he cannot be adjudged free from criminal
liability for violation of B.P. Blg. 22. The mere issuance of
worthless checks with knowledge of the insufficiency of funds
to support the checks is in itself an offense.25
In Jose v. Suarez,26 the prejudicial question under
determination was whether the daily interest rate of 5% was
void, such that the checks issued by respondents to cover said
interest were likewise void for being contra bonos mores, and
thus the cases for B.P. Blg. 22 will no longer prosper. In
resolving the issue, We ruled that "whether or not the interest
rate imposed by petitioners is eventually declared void for
being contra bonos mores will not affect the outcome of the BP
Blg. 22 cases because what will ultimately be penalized is the
mere issuance of bouncing checks. In fact, the primordial
question posed before the court hearing the B.P. Blg. 22 cases
is whether the law has been breached; that is, if a bouncing
check has been issued."
Further, We held in Ricaforte v. Jurado,27 that:
The gravamen of the offense punished by B.P. Blg. 22 is the act
of making and issuing a worthless check; that is, a check that is
dishonored upon its presentation for payment. In Lozano v.
Martinez, we have declared that it is not the non-payment of an
obligation which the law punishes. The law is not intended or
designed to coerce a debtor to pay his debt. The thrust of the
law is to prohibit, under pain of penal sanctions, the making
and circulation of worthless checks. Because of its deleterious
effects on the public interest, the practice is proscribed by the
law. The law punishes the act not as an offense against
property, but an offense against public order. In People v.
Nitafan, we said that a check issued as an evidence of debt -
though not intended to be presented for payment - has the
same effect as an ordinary check and would fall within the
ambit of B.P. Blg. 22.
x x x The mere act of issuing a worthless check - whether as a
deposit, as a guarantee or even as evidence of pre-existing debt
- is malum prohibitum.
To determine the reason for which checks are issued, or the
terms and conditions for their issuance, will greatly erode the
faith the public reposes in the stability and commercial value of
checks as currency substitutes, and bring about havoc in trade
and in banking communities. So what the law punishes is the
issuance of a bouncing check and not the purpose for which it
was issued or the terms and conditions relating to its issuance.
The mere act of issuing a worthless check is malum
prohibitum.28
Moreover, petitioner's reliance on Ras v. Rasul29 is misplaced.
The case of Ras involves a complaint for nullification of a deed
of sale on the ground of an alleged double sale. While the civil
case was pending, an information for estafa was filed against
Ras (the defendant in the civil case) arising from the same
alleged double sale, subject matter of the civil complaint. The
Court ruled that there was a prejudicial question considering
that the defense in the civil case was based on the very same
facts that would be determinative of the guilt or innocence of
the accused in the estafa case.
The instant case is different from Ras, inasmuch as the
determination of whether the petitioner is liable to pay the
private respondents the value of the checks and damages, will
not affect the guilt or innocence of the petitioner because the
material question in the criminal cases is whether petitioner
had issued bad checks, regardless of the purpose or condition
of its issuance.
Guided by the following legal precepts, it is clear that the
determination of the issues involved in Civil Case Nos. 6231 and
6238 for collection of sum of money and damages is irrelevant
to the guilt or innocence of the petitioner in the criminal cases
for violation of B.P. Blg. 22.
In addition, petitioner's claim of lack of consideration may be
raised as a defense during the trial of the criminal cases against
him. The validity and merits of a party’s defense and
accusation, as well as the admissibility and weight of
testimonies and evidence brought before the court, are better
ventilated during trial proper.
Precisely, the reason why a state has courts of law is to
ascertain the respective rights of the parties, to examine and to
put to test all their respective allegations and evidence through
a well designed machinery termed "trial." Thus, all the defenses
available to the accused should be invoked in the trial of the
criminal cases. This court is not the proper forum that should
ascertain the facts and decide the case for violation of B.P. Blg.
22 filed against the petitioner.

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

decision of the RTC.

WHEREFORE, the petition is DENIED and the Decision dated

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

SO ORDERED.

DREAMWORKS CONSTRUCTION VS JANIOLA

VELASCO, JR., J.:

The Case
Petitioner Dreamwork Construction, Inc. seeks the reversal of
the August 26, 2008 Decision1 in SCA No. 08-0005 of the
Regional Trial Court (RTC), Branch 253 in Las Piñas City. The
Decision affirmed the Orders dated October 16, 20072 and
March 12, 20083 in Criminal Case Nos. 55554-61 issued by the
Metropolitan Trial Court (MTC), Branch 79 in Las Piñas City.
The Facts
On October 18, 2004, petitioner, through its President, Roberto
S. Concepcion, and Vice-President for Finance and Marketing,
Normandy P. Amora, filed a Complaint Affidavit dated October
5, 20044 for violation of Batas Pambansa Bilang 22 (BP 22)
against private respondent Cleofe S. Janiola with the Office of
the City Prosecutor of Las Piñas City. The case was docketed as
I.S. No. 04-2526-33. Correspondingly, petitioner filed a criminal
information for violation of BP 22 against private respondent
with the MTC on February 2, 2005 docketed as Criminal Case
Nos. 55554-61, entitled People of the Philippines v. Cleofe S.
Janiola.
On September 20, 2006, private respondent, joined by her
husband, instituted a civil complaint against petitioner by filing
a Complaint dated August 20065 for the rescission of an
alleged construction agreement between the parties, as well as
for damages. The case was filed with the RTC, Branch 197 in
Las Piñas City and docketed as Civil Case No. LP-06-0197.
Notably, the checks, subject of the criminal cases before the
MTC, were issued in consideration of the construction
agreement
Thereafter, on July 25, 2007, private respondent filed a Motion
to Suspend Proceedings dated July 24, 20076 in Criminal Case
Nos. 55554-61, alleging that the civil and criminal cases
involved facts and issues similar or intimately related such that
in the resolution of the issues in the civil case, the guilt or
innocence of the accused would necessarily be determined. In
other words, private respondent claimed that the civil case
posed a prejudicial question as against the criminal cases.
Petitioner opposed the suspension of the proceedings in the
criminal cases in an undated Comment/Opposition to
Accused’s Motion to Suspend Proceedings based on Prejudicial
Question7 on the grounds that: (1) there is no prejudicial
question in this case as the rescission of the contract upon
which the bouncing checks were issued is a separate and
distinct issue from the issue of whether private respondent
violated BP 22; and (2) Section 7, Rule 111 of the Rules of Court
states that one of the elements of a prejudicial question is that
"the previously instituted civil action involves an issue similar or
intimately related to the issue raised in the subsequent criminal
action"; thus, this element is missing in this case, the criminal
case having preceded the civil case.
Later, the MTC issued its Order dated October 16, 2007,
granting the Motion to Suspend Proceedings, and reasoned
that:
Should the trial court declare the rescission of contract and the
nullification of the checks issued as the same are without
consideration, then the instant criminal cases for alleged
violation of BP 22 must be dismissed. The belated filing of the
civil case by the herein accused did not detract from the
correctness of her cause, since a motion for suspension of a
criminal action may be filed at any time before the prosecution
rests (Section 6, Rule 111, Revised Rules of Court).8
In an Order dated March 12, 2008,9 the MTC denied
petitioner’s Motion for Reconsideration dated November 29,
2007.
Petitioner appealed the Orders to the RTC with a Petition dated
May 13, 2008. Thereafter, the RTC issued the assailed decision
dated August 26, 2008, denying the petition. On the issue of
the existence of a prejudicial question, the RTC ruled:
Additionally, it must be stressed that the requirement of a
"previously" filed civil case is intended merely to obviate delays
in the conduct of the criminal proceedings. Incidentally, no
clear evidence of any intent to delay by private respondent was
shown. The criminal proceedings are still in their initial stages
when the civil action was instituted. And, the fact that the civil
action was filed after the criminal action was instituted does
not render the issues in the civil action any less prejudicial in
character.10
Hence, we have this petition under Rule 45.
The Issue
WHETHER OR NOT THE COURT A QUO SERIOUSLY ERRED
IN NOT PERCEIVING GRAVE ABUSE OF DISCRETION ON THE
PART OF THE INFERIOR COURT, WHEN THE LATTER RULED
TO SUSPEND PROCEEDINGS IN CRIM. CASE NOS. 55554-61
ON THE BASIS OF "PREJUDICIAL QUESTION" IN CIVIL CASE
NO. LP-06-0197.11
The Court’s Ruling
This petition must be granted. The Civil Action Must Precede
the Filing of the Criminal Action for a Prejudicial Question to
Exist
Under the 1985 Rules on Criminal Procedure, as amended by
Supreme Court Resolutions dated June 17, 1988 and July 7,
1988, the elements of a prejudicial question are contained in
Rule 111, Sec. 5, which states:
SEC. 5. Elements of prejudicial question. — The two (2)
essential elements of a prejudicial question are: (a) the civil
action involves an issue similar or intimately related to the issue
raised in the criminal action; and (b) the resolution of such issue
determines whether or not the criminal action may proceed.
Thus, the Court has held in numerous cases12 that the
elements of a prejudicial question, as stated in the above-
quoted provision and in Beltran v. People,13 are:
The rationale behind the principle of prejudicial question is to
avoid two conflicting decisions. It has two essential elements:
(a) the civil action involves an issue similar or intimately related
to the issue raised in the criminal action; and (b) the resolution
of such issue determines whether or not the criminal action
may proceed.
On December 1, 2000, the 2000 Rules on Criminal Procedure,
however, became effective and the above provision was
amended by Sec. 7 of Rule 111, which applies here and now
provides:
SEC. 7. Elements of prejudicial question.—The elements of a
prejudicial question are: (a) the previously instituted civil action
involves an issue similar or intimately related to the issue raised
in the subsequent criminal action, and (b) the resolution of such
issue determines whether or not the criminal action may
proceed. (Emphasis supplied.)
Petitioner interprets Sec. 7(a) to mean that in order for a civil
case to create a prejudicial question and, thus, suspend a
criminal case, it must first be established that the civil case was
filed previous to the filing of the criminal case. This, petitioner
argues, is specifically to guard against the situation wherein a
party would belatedly file a civil action that is related to a
pending criminal action in order to delay the proceedings in the
latter.
On the other hand, private respondent cites Article 36 of the
Civil Code which provides:
Art. 36. Pre-judicial questions which must be decided before
any criminal prosecution may be instituted or may proceed,
shall be governed by rules of court which the Supreme Court
shall promulgate and which shall not be in conflict with the
provisions of this Code. (Emphasis supplied.)
Private respondent argues that the phrase "before any criminal
prosecution may be instituted or may proceed" must be
interpreted to mean that a prejudicial question exists when the
civil action is filed either before the institution of the criminal
action or during the pendency of the criminal action. Private
respondent concludes that there is an apparent conflict in the
provisions of the Rules of Court and the Civil Code in that the
latter considers a civil case to have presented a prejudicial
question even if the criminal case preceded the filing of the civil
case.
We cannot agree with private respondent.
First off, it is a basic precept in statutory construction that a
"change in phraseology by amendment of a provision of law
indicates a legislative intent to change the meaning of the
provision from that it originally had."14 In the instant case, the
phrase, "previously instituted," was inserted to qualify the
nature of the civil action involved in a prejudicial question in
relation to the criminal action. This interpretation is further
buttressed by the insertion of "subsequent" directly before the
term criminal action. There is no other logical explanation for
the amendments except to qualify the relationship of the civil
and criminal actions, that the civil action must precede the
criminal action.
Thus, this Court ruled in Torres v. Garchitorena15 that:
Even if we ignored petitioners’ procedural lapse and resolved
their petition on the merits, we hold that Sandiganbayan did
not abuse its discretion amounting to excess or lack of
jurisdiction in denying their omnibus motion for the suspension
of the proceedings pending final judgment in Civil Case No.
7160. Section 6, Rule lll of the Rules of Criminal Procedure, as
amended, reads:
Sec. 6. Suspension by reason of prejudicial question. - A
petition for suspension of the criminal action based upon the
pendency of a prejudicial question in a civil action may be filed
in the office of the prosecutor or the court conducting the
preliminary investigation. When the criminal action has been
filed in court for trial, the petition to suspend shall be filed in
the same criminal action at any time before the prosecution
rests.
Sec. 7. Elements of prejudicial question. - The elements of a
prejudicial question are: (a) the previously instituted civil action
involves an issue similar or intimately related to the issue raised
in the subsequent criminal action, and (b) the resolution of such
issue determines whether or not the criminal action may
proceed.
Under the amendment, a prejudicial question is understood in
law as that which must precede the criminal action and which
requires a decision before a final judgment can be rendered in
the criminal action with which said question is closely
connected. The civil action must be instituted prior to the
institution of the criminal action. In this case, the Information
was filed with the Sandiganbayan ahead of the complaint in
Civil Case No. 7160 filed by the State with the RTC in Civil Case
No. 7160. Thus, no prejudicial question exists. (Emphasis
supplied.)
Additionally, it is a principle in statutory construction that "a
statute should be construed not only to be consistent with itself
but also to harmonize with other laws on the same subject
matter, as to form a complete, coherent and intelligible
system."16 This principle is consistent with the maxim,
interpretare et concordare leges legibus est optimus
interpretandi modus or every statute must be so construed and
harmonized with other statutes as to form a uniform system of
jurisprudence.171 a vv p h i l
In other words, every effort must be made to harmonize
seemingly conflicting laws. It is only when harmonization is
impossible that resort must be made to choosing which law to
apply.
In the instant case, Art. 36 of the Civil Code and Sec. 7 of Rule
111 of the Rules of Court are susceptible of an interpretation
that would harmonize both provisions of law. The phrase
"previously instituted civil action" in Sec. 7 of Rule 111 is plainly
worded and is not susceptible of alternative interpretations.
The clause "before any criminal prosecution may be instituted
or may proceed" in Art. 36 of the Civil Code may, however, be
interpreted to mean that the motion to suspend the criminal
action may be filed during the preliminary investigation with
the public prosecutor or court conducting the investigation, or
during the trial with the court hearing the case.
This interpretation would harmonize Art. 36 of the Civil Code
with Sec. 7 of Rule 111 of the Rules of Court but also with Sec. 6
of Rule 111 of the Civil Code, which provides for the situations
when the motion to suspend the criminal action during the
preliminary investigation or during the trial may be filed. Sec. 6
provides:
SEC. 6. Suspension by reason of prejudicial question.—A
petition for suspension of the criminal action based upon the
pendency of a prejudicial question in a civil action may be filed
in the office of the prosecutor or the court conducting the
preliminary investigation. When the criminal action has been
filed in court for trial, the petition to suspend shall be filed in
the same criminal action at any time before the prosecution
rests.
Thus, under the principles of statutory construction, it is this
interpretation of Art. 36 of the Civil Code that should govern in
order to give effect to all the relevant provisions of law.
It bears pointing out that the circumstances present in the
instant case indicate that the filing of the civil action and the
subsequent move to suspend the criminal proceedings by
reason of the presence of a prejudicial question were a mere
afterthought and instituted to delay the criminal proceedings.
In Sabandal v. Tongco,18 we found no prejudicial question
existed involving a civil action for specific performance,
overpayment, and damages, and a criminal complaint for BP
22, as the resolution of the civil action would not determine the
guilt or innocence of the accused in the criminal case. In
resolving the case, we said:
Furthermore, the peculiar circumstances of the case clearly
indicate that the filing of the civil case was a ploy to delay the
resolution of the criminal cases. Petitioner filed the civil case
three years after the institution of the criminal charges against
him. Apparently, the civil action was instituted as an
afterthought to delay the proceedings in the criminal cases.19
Here, the civil case was filed two (2) years after the institution
of the criminal complaint and from the time that private
respondent allegedly withdrew its equipment from the job site.
Also, it is worth noting that the civil case was instituted more
than two and a half (2 ½) years from the time that private
respondent allegedly stopped construction of the proposed
building for no valid reason. More importantly, the civil case
praying for the rescission of the construction agreement for
lack of consideration was filed more than three (3) years from
the execution of the construction agreement.
Evidently, as in Sabandal, the circumstances surrounding the
filing of the cases involved here show that the filing of the civil
action was a mere afterthought on the part of private
respondent and interposed for delay. And as correctly argued
by petitioner, it is this scenario that Sec. 7 of Rule 111 of the
Rules of Court seeks to prevent. Thus, private respondent’s
positions cannot be left to stand.
The Resolution of the Civil Case Is Not Determinative of the
Prosecution of the Criminal Action
In any event, even if the civil case here was instituted prior to
the criminal action, there is, still, no prejudicial question to
speak of that would justify the suspension of the proceedings in
the criminal case.
To reiterate, the elements of a prejudicial question under Sec. 7
of Rule 111 of the Rules of Court are: (1) the previously
instituted civil action involves an issue similar or intimately
related to the issue raised in the subsequent criminal action;
and (2) the resolution of such issue determines whether or not
the criminal action may proceed.
Petitioner argues that the second element of a prejudicial
question, as provided in Sec. 7 of Rule 111 of the Rules, is
absent in this case. Thus, such rule cannot apply to the present
controversy.
Private respondent, on the other hand, claims that if the
construction agreement between the parties is declared null
and void for want of consideration, the checks issued in
consideration of such contract would become mere scraps of
paper and cannot be the basis of a criminal prosecution.
We find for petitioner.
It must be remembered that the elements of the crime
punishable under BP 22 are as follows:
(1) the making, drawing, and issuance of any check to apply for
account or for value
It must be emphasized that the gravamen of the offense charge
is the issuance of a bad check. The purpose for which the check
was issued, the terms and conditions relating to its issuance, or
any agreement surrounding such issuance are irrelevant to the
prosecution and conviction of petitioner. To determine the
reason for which checks are issued, or the terms and conditions
for their issuance, will greatly erode the faith the public reposes
in the stability and commercial value of checks as currency
substitutes, and bring havoc in trade and in banking
communities. The clear intention of the framers of B.P. 22 is to
make the mere act of issuing a worthless check malum
prohibitum.
Lee v. Court of Appeals23 is even more poignant. In that case,
we ruled that the issue of lack of valuable consideration for the
issuance of checks which were later on dishonored for
insufficient funds is immaterial to the success of a prosecution
for violation of BP 22, to wit:
Third issue. Whether or not the check was issued on account or
for value.
Petitioner’s claim is not feasible. We have held that upon
issuance of a check, in the absence of evidence to the contrary,
it is presumed that the same was issued for valuable
consideration. Valuable consideration, in turn, may consist
either in some right, interest, profit or benefit accruing to the
party who makes the contract, or some forbearance,
detriment, loss or some responsibility, to act, or labor, or
service given, suffered or undertaken by the other side. It is an
obligation to do, or not to do in favor of the party who makes
the contract, such as the maker or indorser.
making of worthless checks and putting them into
circulation.24
Verily, even if the trial court in the civil case declares that the
construction agreement between the parties is void for lack of
consideration, this would not affect the prosecution of private
respondent in the criminal case. The fact of the matter is that
private respondent indeed issued checks which were
subsequently dishonored for insufficient funds. It is this fact
that is subject of prosecution under BP 22.lawphil.net
Therefore, it is clear that the second element required for the
existence of a prejudicial question, that the resolution of the
issue in the civil action would determine whether the criminal
action may proceed, is absent in the instant case. Thus, no
prejudicial question exists and the rules on it are inapplicable to
the case before us.
WHEREFORE, we GRANT this petition. We hereby REVERSE
and SET ASIDE the August 26, 2008 Decision in SCA No. 08-
0005 of the RTC, Branch 253 in Las Piñas City and the Orders
dated October 16, 2007 and March 12, 2008 in Criminal Case
Nos. 55554-61 of the MTC, Branch 79 in Las Piñas City. We
order the MTC to continue with the proceedings in Criminal
Case Nos. 55554-61 with dispatch.
No costs.
SO ORDERED.

(2) the knowledge of the maker, drawer, or issuer that at the
time of issue there are no sufficient funds in or credit with the
drawee bank for the payment of such check in full upon its
presentment; and
(3) the subsequent dishonor of the check by the drawee bank
for insufficiency of funds or credit, or dishonor for the same
reason had not the drawer, without any valid cause, ordered
the bank to stop payment.20
Undeniably, the fact that there exists a valid contract or
agreement to support the issuance of the check/s or that the
checks were issued for valuable consideration does not make
up the elements of the crime. Thus, this Court has held in a long
line of cases21 that the agreement surrounding the issuance of
dishonored checks is irrelevant to the prosecution for violation
of BP 22. In Mejia v. People,22 we ruled:
In this case, petitioner himself testified that he signed several
checks in blank, the subject check included, in exchange for
2.5% interest from the proceeds of loans that will be made
from said account. This is a valuable consideration for which
the check was issued. That there was neither a pre-existing
obligation nor an obligation incurred on the part of petitioner
when the subject check was given by Bautista to private
complainant on July 24, 1993 because petitioner was no longer
connected with Unlad or Bautista starting July 1989, cannot be
given merit since, as earlier discussed, petitioner failed to
adequately prove that he has severed his relationship with
Bautista or Unlad.
At any rate, we have held that what the law punishes is the
mere act of issuing a bouncing check, not the purpose for which
it was issued nor the terms and conditions relating to its
issuance. This is because the thrust of the law is to prohibit the

PIMENTEL VS PIMENTEL
CARPIO, J.:
The Case
Before the Court is a petition for review1 assailing the
Decision2 of the Court of Appeals, promulgated on 20 March
2006, in CA-G.R. SP No. 91867.
The Antecedent Fact
The facts are stated in the Court of Appeals’ decision:
On 25 October 2004, Maria Chrysantine Pimentel y Lacap
(private respondent) filed an action for frustrated parricide
against Joselito R. Pimentel (petitioner), docketed as Criminal
Case No. Q-04-130415, before the Regional Trial Court of
Quezon City, which was raffled to Branch 223 (RTC Quezon
City).
On 7 February 2005, petitioner received summons to appear
before the Regional Trial Court of Antipolo City, Branch 72 (RTC
Antipolo) for the pre-trial and trial of Civil Case No. 04-7392
(Maria Chrysantine Lorenza L. Pimentel v. Joselito Pimentel)
for Declaration of Nullity of Marriage under Section 36 of the
Family Code on the ground of psychological incapacity.
On 11 February 2005, petitioner filed an urgent motion to
suspend the proceedings before the RTC Quezon City on the
ground of the existence of a prejudicial question. Petitioner
asserted that since the relationship between the offender and
the victim is a key element in parricide, the outcome of Civil
Case No. 04-7392 would have a bearing in the criminal case
filed against him before the RTC Quezon City.
The Decision of the Trial Court
The RTC Quezon City issued an Order dated 13 May 20053
holding that the pendency of the case before the RTC Antipolo
is not a prejudicial question that warrants the suspension of the
criminal case before it. The RTC Quezon City held that the
issues in Criminal Case No. Q-04-130415 are the injuries
sustained by respondent and whether the case could be tried
even if the validity of petitioner’s marriage with respondent is
in question. The RTC Quezon City ruled:
WHEREFORE, on the basis of the foregoing, the Motion to
Suspend Proceedings On the [Ground] of the Existence of a
Prejudicial Question is, for lack of merit, DENIED.
SO ORDERED.4
Petitioner filed a motion for reconsideration. In its 22 August
2005 Order,5 the RTC Quezon City denied the motion.
Petitioner filed a petition for certiorari with application for a
writ of preliminary injunction and/or temporary restraining
order before the Court of Appeals, assailing the 13 May 2005
and 22 August 2005 Orders of the RTC Quezon City.
The Decision of the Court of Appeals
In its 20 March 2006 Decision, the Court of Appeals dismissed
the petition. The Court of Appeals ruled that in the criminal
case for frustrated parricide, the issue is whether the offender
commenced the commission of the crime of parricide directly
by overt acts and did not perform all the acts of execution by
reason of some cause or accident other than his own
spontaneous desistance. On the other hand, the issue in the
civil action for annulment of marriage is whether petitioner is
psychologically incapacitated to comply with the essential
marital obligations. The Court of Appeals ruled that even if the
marriage between petitioner and respondent would be
declared void, it would be immaterial to the criminal case
because prior to the declaration of nullity, the alleged acts
constituting the crime of frustrated parricide had already been
committed. The Court of Appeals ruled that all that is required
for the charge of frustrated parricide is that at the time of the
commission of the crime, the marriage is still subsisting.
Petitioner filed a petition for review before this Court assailing
the Court of Appeals’ decision.
The Issue
The only issue in this case is whether the resolution of the
action for annulment of marriage is a prejudicial question that
warrants the suspension of the criminal case for frustrated
parricide against petitioner.
The Ruling of this Court
The petition has no merit.
Civil Case Must be Instituted Before the Criminal Case
Section 7, Rule 111 of the 2000 Rules on Criminal Procedure6
provides:
Section 7. Elements of Prejudicial Question. - The elements of a
prejudicial question are: (a) the previously instituted civil action
involves an issue similar or intimately related to the issue raised
in the subsequent criminal action and (b) the resolution of such
issue determines whether or not the criminal action may
proceed.
The rule is clear that the civil action must be instituted first
before the filing of the criminal action. In this case, the
Information7 for Frustrated Parricide was dated 30 August
2004. It was raffled to RTC Quezon City on 25 October 2004 as
per the stamped date of receipt on the Information. The RTC
Quezon City set Criminal Case No. Q-04-130415 for pre-trial
and trial on 14 February 2005. Petitioner was served summons
in Civil Case No. 04-7392 on 7 February 2005.8 Respondent’s
petition9 in Civil Case No. 04-7392 was dated 4 November 2004
and was filed on 5 November 2004. Clearly, the civil case for
annulment was filed after the filing of the criminal case for
frustrated parricide. As such, the requirement of Section 7, Rule
111 of the 2000 Rules on Criminal Procedure was not met since
the civil action was filed subsequent to the filing of the criminal
action.
Annulment of Marriage is not a Prejudicial Question in Criminal
Case for Parricide
Further, the resolution of the civil action is not a prejudicial
question that would warrant the suspension of the criminal
action.
There is a prejudicial question when a civil action and a criminal
action are both pending, and there exists in the civil action an
issue which must be preemptively resolved before the criminal
action may proceed because howsoever the issue raised in the
civil action is resolved would be determinative of the guilt or
innocence of the accused in the criminal case.10 A prejudicial
question is defined as:
x x x one that arises in a case the resolution of which is a logical
antecedent of the issue involved therein, and the cognizance of
which pertains to another tribunal. It is a question based on a
fact distinct and separate from the crime but so intimately
connected with it that it determines the guilt or innocence of
the accused, and for it to suspend the criminal action, it must
appear not only that said case involves facts intimately related
to those upon which the criminal prosecution would be based
but also that in the resolution of the issue or issues raised in the
civil case, the guilt or innocence of the accused would
necessarily be determined.11
The relationship between the offender and the victim is a key
element in the crime of parricide,12 which punishes any person
"who shall kill his father, mother, or child, whether legitimate
or illegitimate, or any of his ascendants or descendants, or his
spouse."13 The relationship between the offender and the WHEREFORE, we DENY the petition. We AFFIRM the 20 March
victim distinguishes the crime of parricide from murder14 or 2006 Decision of the Court of Appeals in CA-G.R. SP No. 91867.
homicide.15 However, the issue in the annulment of marriage is
not similar or intimately related to the issue in the criminal case SO ORDERED.
for parricide. Further, the relationship between the offender
and the victim is not determinative of the guilt or innocence of
the accused.

The issue in the civil case for annulment of marriage under

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

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

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

In view of the foregoing, the Court upholds the decision of the

Court of Appeals. The trial in Criminal Case No. Q-04-130415
may proceed as the resolution of the issue in Civil Case No. 04-
7392 is not determinative of the guilt or innocence of petitioner
in the criminal case.
CONSING JR. VS PEOPLE
BERSAMIN, J.:
An independent civil action based on fraud initiated by the
defrauded party does not raise a prejudicial question to stop
the proceedings in a pending criminal prosecution of the
defendant for estafa through falsification. This is because the
result of the independent civil action is irrelevant to the issue of
guilt or innocence of the accused.
The Case
On appeal is the amended decision promulgated on August 18,
2003,1 whereby the Court of Appeals (CA) granted the writ of
certiorari upon petition by the State in C.A.-G.R. No. 71252
entitled People v. Han. Winlove M Dumayas, Presiding Judge,
Branch 59, Regional Trial Court, Makati City and Rafael
Consing, Jr., and set aside the assailed order issued on
November 26, 2001 by the Regional Trial Court (RTC), Branch
59, in Makati City deferring the arraignment of petitioner in
Criminal Case No. 00-120 entitled People v. Rafael Consing, Jr.
upon his motion on the ground of the existence of a prejudicial
question in the civil cases pending between him and the
complainant in the trial courts in Pasig City and Makati City.
Antecedents
Petitioner negotiated with and obtained for himself and his
mother, Cecilia de la Cruz (de la Cruz) various loans totaling
₱18,000,000.00 from Unicapital Inc. (Unicapital). The loans
were secured by a real estate mortgage constituted on a parcel
of land (property) covered by Transfer Certificate of Title (TCT)
No. T-687599 of the Registry of Deeds for the Province of
Cavite registered under the name of de la Cruz.2 In accordance
with its option to purchase the mortgaged property, Unicapital
agreed to purchase one-half of the property for a total
consideration of ₱21,221,500.00. Payment was effected by off-
setting the amounts due to
Unicapital under the promissory notes of de la Cruz and
Consing in the amount of ₱18,000,000.00 and paying an
additional amount of ₱3,145,946.50. The other half of the
property was purchased by Plus Builders, Inc. (Plus Builders), a
joint venture partner of Unicapital.3
Before Unicapital and Plus Builders could develop the property,
they learned that the title to the property was really TCT No.
114708 in the names of Po Willie Yu and Juanito Tan Teng, the
parties from whom the property had been allegedly acquired
by de la Cruz. TCT No. 687599 held by De la Cruz appeared to
be spurious.4
On its part, Unicapital demanded the return of the total
amount of ₱41,377,851.48 as of April 19, 1999 that had been
paid to and received by de la Cruz and Consing, but the latter
ignored the demands.5
On July 22, 1999, Consing filed Civil Case No. 1759 in the Pasig
City Regional Trial Court (RTC) (Pasig civil case) for injunctive
relief, thereby seeking to enjoin Unicapital from proceeding
against him for the collection of the ₱41,377,851.48 on the
ground that he had acted as a mere agent of his mother.
On the same date, Unicapital initiated a criminal complaint for
estafa through falsification of public document against Consing
and de la Cruz in the Makati City Prosecutor’s Office.6
On August 6, 1999, Unicapital sued Consing in the RTC in
Makati City (Civil Case No. 99-1418) for the recovery of a sum of
money and damages, with an application for a writ of
preliminary attachment (Makati civil case).7
On January 27, 2000, the Office of the City Prosecutor of
Makati City filed against Consing and De la Cruz an information
for estafa through falsification of public document in the RTC in
Makati City (Criminal Case No. 00-120), which was assigned to
Branch 60 (Makati criminal case).8
On February 15, 2001, Consing moved to defer his arraignment
in the Makati criminal case on the ground of existence of a
prejudicial question due to the pendency of the Pasig and
Makati civil cases. On September 25, 2001, Consing reiterated
his motion for deferment of his arraignment, citing the
additional ground of pendency of CA-G.R. SP No. 63712 in the
CA. On November 19, 2001, the Prosecution opposed the
motion.9
On November 26, 2001, the RTC issued an order suspending
the proceedings in the Makati criminal case on the ground of
the existence of a prejudicial question, and on March 18, 2001,
the RTC denied the Prosecution’s motion for
reconsideration.10
The State thus assailed in the CA the last two orders of the RTC
in the Makati criminal case via petition for certiorari (C.A.-G.R.
SP No. 71252).
On May 20, 2003, the CA promulgated its decision in C.A.-G.R.
SP No. 71252,11 dismissing the petition for certiorari and
upholding the RTC’s questioned orders, explaining:
Is the resolution of the Pasig civil case prejudicial to the Cavite
and Makati criminal cases?
We hold that it is. The resolution of the issue in the Pasig case,
i.e. whether or not private respondent may be held liable in the
questioned transaction, will determine the guilt or innocence of
private respondent Consing in both the Cavite and Makati
criminal cases.
The analysis and comparison of the Pasig civil case, Makati
criminal case, Makati civil case and Cavite criminal case show
that: (1) the parties are identical; (2) the transactions in
controversy are identical; (3) the Transfer Certificate of Titles
(TCT) involved are identical; (4) the questioned Deeds of
Sale/Mortgage are identical; (5) the dates in question are
identical; and (6) the issue of private respondent’s culpability
for the questioned transactions is identical in all the
proceedings.
As discussed earlier, not only was the issue raised in the Pasig
civil case identical to or intimately related to the criminal cases
in Cavite and Makati. The similarities also extend to the parties
in the cases and the TCT and Deed of Sale/ Mortgage involved
in the questioned transactions.
The respondent Judge, in ordering the suspension of the
arraignment of private respondent in the Makati case, in view
of CA-G.R. SP No. 63712, where Unicapital was not a party
thereto, did so pursuant to its mandatory power to take judicial
notice of an official act of another judicial authority. It was also
a better legal tack to prevent multiplicity of action, to which our
legal system abhors.
Applying the Tuanda ruling, the pendency of CA-G.R. SP No.
63712 may be validly invoked to suspend private respondent’s
arraignment in the Makati City criminal case, notwithstanding
the fact that CA-G.R. SP No. 63712 was an offshoot, merely, in
the Cavite criminal case.12
In the meanwhile, on October 13, 1999, Plus Builders
commenced its own suit for damages against Consing (Civil
Case No. 99-95381) in the RTC in Manila (Manila civil case).13
On January 21, 2000, an information for estafa through
falsification of public document was filed against Consing and
De la Cruz in the RTC in Imus, Cavite, docketed as Criminal
Case No. 7668-00 and assigned to Branch 21 (Cavite criminal
case). Consing filed a motion to defer the arraignment on the
ground of the existence of a prejudicial question, i.e., the
pendency of the Pasig and Manila civil cases. On January 27,
2000, however, the RTC handling the Cavite criminal case
denied Consing’s motion. Later on, it also denied his motion for
reconsideration. Thereafter, Consing commenced in the CA a
special civil action for certiorari with prayer for the issuance of a
temporary restraining order (TRO) and/or writ of preliminary
injunction (C.A.-G.R. SP No. 63712), seeking to enjoin his
arraignment and trial in the Cavite criminal case. The CA
granted the TRO on March 19, 2001, and later promulgated its
decision on May 31, 2001, granting Consing’ petition for
certiorari and setting aside the January 27, 2000 order of the
RTC, and permanently enjoining the RTC from proceeding with
the arraignment and trial until the Pasig and Manila civil cases
had been finally decided.
Not satisfied, the State assailed the decision of the CA in this
Court (G.R. No. 148193), praying for the reversal of the May 31,
2001 decision of the CA. On January 16, 2003, the Court
granted the petition for review in G.R. No. 148193, and reversed
and set aside the May 31, 2001 decision of the CA,14 viz:
In the case at bar, we find no prejudicial question that would
justify the suspension of the proceedings in the criminal case
(the Cavite criminal case). The issue in Civil Case No. SCA 1759
(the Pasig civil case) for Injunctive Relief is whether or not
respondent (Consing) merely acted as an agent of his mother,
Cecilia de la Cruz; while in Civil Case No. 99-95381 (the Manila
civil case), for Damages and Attachment, the question is
whether respondent and his mother are liable to pay damages
and to return the amount paid by PBI for the purchase of the
disputed lot. Even if respondent is declared merely an agent of
his mother in the transaction involving the sale of the
questioned lot, he cannot be adjudged free from criminal
liability. An agent or any person may be held liable for
conspiring to falsify public documents. Hence, the
determination of the issue involved in Civil Case No. SCA 1759
for Injunctive Relief is irrelevant to the guilt or innocence of the
respondent in the criminal case for estafa through falsification
of public document.
Likewise, the resolution of PBI’s right to be paid damages and
the purchase price of the lot in question will not be
determinative of the culpability of the respondent in the
criminal case for even if PBI is held entitled to the return of the
purchase price plus damages, it does not ipso facto follow that
respondent should be held guilty of estafa through falsification
of public document. Stated differently, a ruling of the court in
the civil case that PBI should not be paid the purchase price
plus damages will not necessarily absolve respondent of
liability in the criminal case where his guilt may still be
established under penal laws as determined by other evidence.
Moreover, neither is there a prejudicial question if the civil and
the criminal action can, according to law, proceed
independently of each other. Under Rule 111, Section 3 of the
Revised Rules on Criminal Procedure, in the cases provided in
Articles 32, 33, 34 and 2176 of the Civil Code, the independent
civil action may be brought by the offended party. It shall
proceed independently of the criminal action and shall require
only a preponderance of evidence. In no case, however, may
the offended party recover damages twice for the same act or
omission charged in the criminal action.
Thus, in Rojas v. People, the petitioner was accused in a
criminal case for violation of Article 319 of the Revised Penal
Code, for executing a new chattel mortgage on personal
property in favor of another party without consent of the
previous mortgagee. Thereafter, the offended party filed a civil
case for termination of management contract, one of the
causes of action of which consisted of petitioner having
executed a chattel mortgage while the previous chattel
mortgage was still valid and subsisting. Petitioner moved that
the arraignment and trial of the criminal case be held in
abeyance on the ground that the civil case was a prejudicial
question, the resolution of which was necessary before the
criminal proceedings could proceed. The trial court denied the
suspension of the criminal case on the ground that no
prejudicial question exist. We affirmed the order of the trial
court and ruled that:
… the resolution of the liability of the defendant in the civil case
on the eleventh cause of action based on the fraudulent
misrepresentation that the chattel mortgage the defendant
executed in favor of the said CMS Estate, Inc. on February 20,
1957, that his D-6 "Caterpillar" Tractor with Serial No. 9-U-6565
was "free from all liens and encumbrances" will not determine
the criminal liability of the accused in the said Criminal Case
No. 56042 for violation of paragraph 2 of Article 319 of the
Revised Penal Code. . . . (i) That, even granting for the sake of
argument, a prejudicial question is involved in this case, the
fact remains that both the crime charged in the information in
the criminal case and the eleventh cause of action in the civil
case are based upon fraud, hence both the civil and criminal
cases could proceed independently of the other pursuant to
Article 33 of the new Civil Code which provides: "In cases of
defamation, fraud and physical injuries, a civil action for
damages, entirely separate and distinct from the criminal
action shall proceed independently of the criminal prosecution,
and shall require only a preponderance of evidence." (j) That,
therefore, the act of respondent judge in issuing the orders
referred to in the instant petition was not made with "grave
abuse of discretion."
In the instant case, Civil Case No. 99-95381, for Damages and
Attachment on account of the alleged fraud committed by
respondent and his mother in selling the disputed lot to PBI is
an independent civil action under Article 33 of the Civil Code. As
such, it will not operate as a prejudicial question that will justify
the suspension of the criminal case at bar.15
Turning back to the Makati criminal case, the State moved for
the reconsideration of the adverse decision of the CA, citing the
ruling in G.R. No. 148193, supra, to the effect that the Pasig and
Manila civil cases did not present a prejudicial question that
justified the suspension of the proceedings in the Cavite
criminal case, and claiming that under the ruling in G.R. No.
148193, the Pasig and Makati civil cases did not raise a
prejudicial question that would cause the suspension of the
Makati criminal case.
In his opposition to the State’s motion for reconsideration,
Consing contended that the ruling in G.R. No. 148193 was not
binding because G.R. No. 148193 involved Plus Builders, which
was different from Unicapital, the complainant in the Makati
criminal case. He added that the decision in G.R. No. 148193 did
not yet become final and executory, and could still be reversed
at any time, and thus should not control as a precedent to be
relied upon; and that he had acted as an innocent attorney-in-
fact for his mother, and should not be held personally liable
under a contract that had involved property belonging to his
mother as his principal.
On August 18, 2003, the CA amended its decision, reversing
itself. It relied upon the ruling in G.R. No. 148193, and held
thusly:
CA-G.R. SP No. 63712 is similar with the case at bench. The
transactions in controversy, the documents involved; the issue
of the respondent’s culpability for the questioned transactions
are all identical in all the proceedings; and it deals with the
same parties with the exception of private complainant
Unicapital.
However, the Supreme Court, upon review of CA-G.R. SP No.
63712, People of the Philippines vs. Rafael Jose Consing, Jr.
(G.R. No. 148193, January 16, 2003) held that "Civil Case No.
99-95381, for Damages and attachment on account of alleged
fraud committed by respondent and his mother in selling the
disputed lot to Plus Builders, Inc. is an independent civil action
under Article 33 of the Civil Code. As such, it will not operate as
a prejudicial question that will justify the suspension of the
criminal case at bar." In view of the aforementioned decision of
the Supreme Court, We are thus amending Our May 20, 2003
decision.
WHEREFORE, the petitioner’s motion for reconsideration is
GRANTED. The Orders dated November 26, 2001 and March
18, 2002 issued by the respondent Judge are hereby REVERSED
and SET ASIDE. Respondent Judge is hereby ordered to
proceed with the hearing of Criminal Case No. 00-120 with
dispatch.
SO ORDERED.16
Consing filed a motion for reconsideration,17 but the CA denied
the motion through the second assailed resolution of
December 11, 2003.18
Hence, this appeal by petition for review on certiorari.
Issu
Petitioner reiterates his contention that the decision in G.R. No.
148193 was not controlling in relation to C.A.-G.R. No. 71252,
which involved Plus Builders, not Unicapital, the complainant in
Criminal Case No. 00-120. He posits that in arriving at its
amended decision, the CA did not consider the pendency of the
Makati civil case (Civil Case No. 99-1418), which raised a
prejudicial question, considering that the resolution of such civil
action would include the issue of whether he had falsified a
certificate of title or had willfully defrauded Unicapital, the
resolution of either of which would determine his guilt or
innocence in Criminal Case No. 00-120.
In its comment,19 the Office of the Solicitor General (OSG)
counters that Unicapital brought the Makati civil case as an
independent civil action intended to exact civil liability
separately from Criminal Case No. 00-120 in a manner fully
authorized under Section 1(a) and Section 2, Rule 111 of the
Rules of Court.20 It argues that the CA correctly took
cognizance of the ruling in G.R. No. 148193, holding in its
challenged amended decision that the Makati civil case, just
like the Manila civil case, was an independent civil action
instituted by virtue of Article 33 of the Civil Code; that the
Makati civil case did not raise a prejudicial question that
justified the suspension of Criminal Case No. 00-120; and that
as finally settled in G.R. No. 148193, the Pasig civil case did not
also raise any prejudicial question, because the sole issue
thereat was whether Consing, as the mere agent of his mother,
had any obligation or liability toward Unicapital.
In his reply,21 Consing submits that the Pasig civil case that he
filed and Unicapital’s Makati civil case were not intended to
delay the resolution of Criminal Case No. 00-120, nor to pre-
empt such resolution; and that such civil cases could be validly
considered determinative of whether a prejudicial question
existed to warrant the suspension of Criminal Case No. 00-120.
Did the CA err in reversing itself on the issue of the existence of
a prejudicial question that warranted the suspension of the
proceedings in the Makati criminal case?
Ruling
The petition for review on certiorari is absolutely meritless.
Consing has hereby deliberately chosen to ignore the firm
holding in the ruling in G.R. No. 148193 to the effect that the
proceedings in Criminal Case No. 00-120 could not be
suspended because the Makati civil case was an independent
civil action, while the Pasig civil case raised no prejudicial
question. That was wrong for him to do considering that the
ruling fully applied to him due to the similarity between his case
with Plus Builders and his case with Unicapital.
A perusal of Unicapital’s complaint in the Makati civil case
reveals that the action was predicated on fraud. This was
apparent from the allegations of Unicapital in its complaint to
the effect that Consing and de la Cruz had acted in a "wanton,
fraudulent, oppressive, or malevolent manner in offering as
security and later object of sale, a property which they do not
own, and foisting to the public a spurious title."22 As such, the
action was one that could proceed independently of Criminal
Case No. 00-120 pursuant to Article 33 of the Civil Code, which
states as follows:
Article 33. In cases of defamation, fraud, and physical injuries a
civil action for damages, entirely separate and distinct from the
criminal action, may be brought by the injured party. Such civil
action shall proceed independently of the criminal prosecution,
and shall require only a preponderance of evidence.
It is well settled that a civil action based on defamation, fraud
and physical injuries may be independently instituted pursuant
to Article 33 of the Civil Code, and does not operate as a
prejudicial question that will justify the suspension of a criminal
case.23 This was precisely the Court’s thrust in G.R. No. 148193,
thus:
Moreover, neither is there a prejudicial question if the civil and
the criminal action can, according to law, proceed
independently of each other. Under Rule 111, Section 3 of the
Revised Rules on Criminal Procedure, in the cases provided in
Articles 32, 33, 34 and 2176 of the Civil Code, the independent
civil action may be brought by the offended party. It shall
proceed independently of the criminal action and shall require
only a preponderance of evidence. In no case, however, may
the offended party recover damages twice for the same act or
omission charged in the criminal action.
In the instant case, Civil Case No. 99-95381, for Damages and
Attachment on account of the alleged fraud committed by
respondent and his mother in selling the disputed lot to PBI is
an independent civil action under Article 33 of the Civil Code. As
such, it will not operate as a prejudicial question that will justify
the suspension of the criminal case at bar.24
Contrary to Consing’s stance, it was not improper for the CA to
apply the ruling in G.R. No. 148193 to his case with Unicapital,
for, although the Manila and Makati civil cases involved
different complainants (i.e., Plus Builders and Unicapital), the
civil actions Plus Builders and Unicapital had separately
instituted against him were undeniably of similar mold, i.e.,
they were both based on fraud, and were thus covered by
Article 33 of the Civil Code. Clearly, the Makati criminal case
could not be suspended pending the resolution of the Makati
civil case that Unicapital had filed
As far as the Pasig civil case is concerned, the issue of Consing’s
being a mere agent of his mother who should not be criminally
liable for having so acted due to the property involved having
belonged to his mother as principal has also been settled in
G.R. No. 148193, to wit:
In the case at bar, we find no prejudicial question that would
justify the suspension of the proceedings in the criminal case
(the Cavite criminal case). The issue in Civil Case No. SCA 1759
(the Pasig civil case) for Injunctive Relief is whether or not
respondent (Consing) merely acted as an agent of his mother,
Cecilia de la Cruz; while in Civil Case No. 99-95381 (the Manila
civil case), for Damages and Attachment, the question is
whether respondent and his mother are liable to pay damages
and to return the amount paid by PBI for the purchase of the
disputed lot. Even if respondent is declared merely an agent of
his mother in the transaction involving the sale of the
questioned lot, he cannot be adjudged free from criminal
liability. An agent or any person may be held liable for
conspiring to falsify public documents. Hence, the
determination of the issue involved in Civil Case No. SCA 1759
for Injunctive Relief is irrelevant to the guilt or innocence of the
respondent in the criminal case for estafa through falsification
of public document.25 (Words in parentheses supplied; bold
underscoring supplied for emphasis)
WHEREFORE, the Court AFFIRMS the amended decision
promulgated on August 18, 2003; and ORDERS petitioner to
pay the costs of suit.
SO ORDERED.
CATERPILLAR INC. VS SAMSON
BERSAMIN, J.:
The determination of probable cause to charge a person in
court for a criminal offense is exclusively lodged in the
Executive Branch of the Government, through the Department
of Justice. Initially, the determination is done by the
investigating public prosecutor, and on review by the Secretary
of Justice or his duly authorized subordinate. The courts will
respect the determination, unless the same shall be shown to
have been made in grave abuse of discretion amounting to lack
or excess of jurisdiction.
The Cases
Before us are the consolidated cases of G.R. No. 2059721 and
G.R. No. 164352.2
G.R. No. 164352 involves the appeal by petition for review on
certiorari of Caterpillar, Inc. (Caterpillar) to reverse the decision
promulgated on January 21, 20043 by the Court of Appeals (CA)
in CA-G.R. SP No. 75526, and the resolution promulgated on
June 30, 2004 denying the motion for reconsideration thereof.4
G.R. No. 205972 relates to the appeal brought by Caterpillar to
assail the decision and resolution promulgated in CA-G.R. SP
No. 102316 respectively on May 8, 20125 and February 12,
2013,6 whereby the CA affirmed the resolutions of the
Department of Justice (DOJ) finding that there was no probable
cause to indict Manolo P. Samson (Samson) for unfair
competition
Antecedents
Caterpillar is a foreign corporation engaged in the manufacture
and distribution of footwear, clothing and related items,
among others. Its products are known for six core trademarks,
namely, "CATERPILLAR", "CAT" "CATERPILLAR & DESIGN"
"CAT AND DESIGN", "WALKING MACHINES" and "TRACK-
TYPE TRACTOR & DESIGN (Core Marks),7 all of which are
alleged as internationally known. On the other hand, Samson,
doing business under the names and styles of Itti Shoes
Corporation, Kolm's Manufacturing Corporation and Caterpillar
Boutique and General Merchandise, is the proprietor of various
retail outlets in the Philippines selling footwear, bags, clothing,
and related items under the trademark "CATERPILLAR",
registered in 1997 under Trademark Registration No. 64705
issued by the Intellectual Property Office (IPO).8
G.R. No. 164352
On July 26, 2000, upon application of the National Bureau of
Investigation (NBI), the Regional Trial Court (RTC), Branch 56,
in Makati City issued Search Warrants Nos. 00-022 to 00-032,
inclusive, all for unfair competition,9 to search the
establishments owned, controlled and operated by Samson.
The implementation of the search warrants on July 27, 2000 led
to the seizure of various products bearing Caterpillar's Core
Marks.
Caterpillar filed against Samson several criminal complaints for
unfair competition in the Department of Justice (DOJ),
docketed as LS. Nos. 2000-13 54 to 2000-13 64, inclusive.
Additionally, on July 31, 2000, Caterpillar commenced a civil
action against Samson and his business entities, with the IPO
as a nominal party10 - for Unfair Competition, Damages and
Cancellation of Trademark with Application for Temporary
Restraining Order (TRO) and/or Writ of Preliminary Injunction -
docketed as Civil Case No. Q-00-41446 of the RTC in Quezon
City. In said civil action, the RTC denied Caterpillar's application
for the issuance of the TRO on August 17, 2000.
The DOJ, through Senior State Prosecutor Jude R. Romano,
issued a joint resolution dated November 15, 200111
recommending that Samson be criminally charged with unfair
competition under Section 168.3 (a),12 in relation to Section
123.l(e),13 Section 131.114 and Section 170,15 all of Republic
Act No. 8293, or the Intellectual Property Code of the
Philippines (IP Code).
However, because Samson and his affiliate companies allegedly
continued to sell and distribute products clothed with the
general appearance of its own products, Caterpillar again
applied for another set of search warrants against Samson and
his businesses. The RTC, Branch 172, in Valenzuela City issued
Search Warrants Nos. 12-V-00,16 13-V-00,17 20-V-0018 and 29-
V-0019 upon application of the NBI, by virtue of the
implementation of which several goods were seized and
confiscated by the NBI agents.
As a consequence, Caterpillar filed 26 criminal complaints for
unfair competition on January 31, 2001, docketed as LS. Nos.
2001-42 to 2001-67, against Samson and/or the occupants of
his affiliate entities before the DOJ.20 In due course, the DOJ,
through State Prosecutor Zenaida M. Lim, issued a joint
resolution dated September 28, 200121 recommending the
filing of criminal complaints for unfair competition under
Section 168.3(a), in relation to Section 123 .1, Section 131.1 and
Section 170 of the IP Code. Accordingly, six criminal complaints
were filed in the RTC, Branch 256, in Muntinlupa City, presided
by Judge Alberto L. Lerma, docketed as Criminal Cases Nos.
02-238 to 02-243.
On January 17 and 22, 2002, Samson filed a petitions for review
with the Office of the Secretary of Justice to appeal the joint
resolutions in LS. Nos. 2000-1354 to 2000-136422 and LS. Nos.
2001-042 to 2001-067.23
On May 30, 2002, Samson filed a Motion to Suspend
Arraignment in Criminal Cases Nos. 02-238 to 243,24 citing the
following as grounds:25
I.
THERE EXISTS PREJUDICIAL QUESTIONS PENDING
LITIGATION BEFORE THE REGIONAL TRIAL COURT OF
QUEZON CITY, BRANCH 90, IN CIVIL CASE NO. Q-00-41446
ENTITLED: "CATERPILLAR, INC., ET AL. VS. ITTI SHOES
CORPORATION, ET AL.," THE FINAL RESOLUTIONS OF
WHICH WILL DETERMINE THE OUTCOME OF THE INSTANT
CRIMINAL CASES.
II.
ACCUSED HAS FILED PETITIONS FOR REVIEW WITH THE
DEPARTMENT OF JUSTICE ASSAILING THE RESOLUTIONS
OF THE CHIEF STATE PROSECUTOR WHO CAUSED THE
FILING OF THE INSTANT CASES AND ARE STILL PENDING
THEREIN UP TO THE PRESENT.
In the meanwhile, on July 10, 2002, the DOJ, through Secretary
Hernando B. Perez, issued a resolution26 denying Samson's
petition for review in I.S. Nos. 2000-1354 to 2000-1364.
Samson's motion for reconsideration was likewise denied on
May 26, 2003.
On September 23, 2002, Presiding Judge Lerma of the RTC
granted Samson's Motion to Suspend Arraignment, and
suspended the arraignment and all other proceedings in
Criminal Cases Nos. 02-240 to 02-243 until Civil Case No. Q-00-
41446 was finally resolved,27 holding:
After a careful scrutiny of the case, this Court finds that private
complainant, in Civil Case No. Q-00-41446, seeks for the
cancellation of the trademark "CATERPILLAR" which is
registered in the name of the accused and to prevent the latter
from using the said trademark ("CATERPILLAR"), while the
issue in the instant case is the alleged unlawful use by the
accused of the trademark "CATERPILLAR" which is claimed to
be owned by the private complainant. From the foregoing, this
Court believes that there exists a prejudicial question since the
determination of who is really the lawful or registered user of
the trademark "CATERPILLAR" will ultimately determine
whether or not the instant criminal action shall proceed.
Clearly, the issues raised in Civil Case No. Q-00-41446 is similar
or intimately related to the issue in the case at bar for if the civil
case will be resolved sustaining the trademark registration of
the accused for the trademark CATERPILLAR, then the latter
would have all the authority to continue the use of the said
trademark as a consequence of a valid registration, and by
reason of which there may be no more basis to proceed with
the instant criminal action.28
After the RTC denied its motion for reconsideration29 on
December 5, 2002,30 Caterpillar elevated the matter to the CA
by petition for certiorari on February 14, 2003,31 docketed as
C.A.-G.R. SP No. 75526 entitled Caterpillar, Inc. v. Hon. Alberto
L. Lerma, in his capacity as Presiding Judge of Branch 256 of
the Regional Trial Court, Muntinlupa City, and Manolo P.
Samson, alleging grave abuse of discretion amounting to lack
or excess of jurisdiction on the part of the RTC in suspending
the arraignment and other proceedings in Criminal Cases Nos.
02-238 to 02-243 on the ground of the existence of an alleged
prejudicial question in Civil Case No. Q-00-41446 then pending
in the RTC in Quezon City whose resolution would determine
the outcome of the criminal cases.
Meanwhile, on January 13, 2003, Acting Justice Secretary Ma.
Merceditas N. Gutierrez reversed and set aside the resolution
issued by State Prosecutor Lim in I.S. No. 2001-042 to 2001-
067, and directed the Chief State Prosecutor to cause the
withdrawal of the criminal informations filed against Samson in
court,32 disposing as follows
ACCORDINGLY, the assailed joint resolution is hereby
REVERSED and SET ASIDE. The Chief State Prosecutor is
directed to forthwith cause the withdrawal of the informations
filed in court against respondent Manolo P. Samson and to
report action taken hereon within ten (10) days from receipts
hereof.33
Acting Justice Secretary Gutierrez based her resolution on the
order dated June 26, 2001, whereby the RTC of Valenzuela City,
Branch 172, had quashed the 26 search warrants upon motion
of Samson.34 Consequently, the goods seized and confiscated
by virtue of the quashed search warrants could no longer be
admitted in evidence
Correspondingly, Presiding Judge Lerma of the RTC ordered
the withdrawal of Criminal Cases Nos. 02-240 to 02-243 on
February 4, 2003.35 WHEREFORE, foregoing premises considered, the Petition
having no merit in fact and in law is hereby DENIED DUE
Aggrieved, Caterpillar assailed the order of Judge Lerma for the COURSE and ordered DISMISSED. With costs to Petitioners.
withdrawal of Criminal Cases Nos. 02-240 to 02-2432003 by
petition for certiorari in the CA on October 16, 2003, docketed SO ORDERED.40
as CA-G.R. SP No. 79937,36 and the CA ultimately granted the
Caterpillar sought the reconsideration of the dismissal, but the
petition for certiorari,37 setting aside the assailed January 13,
CA denied the motion on June 30, 2004.41
2003 resolution of the Acting Justice Secretary and directing
the re-filing of the withdrawn informations against Samson. Hence, Caterpillar appealed the CA's decision in C.A.-G.R. SP
The Court ultimately affirmed the CA's dec ision through the No. 75526 (G.R. No. 164352).
resolution promulgated on October 17, 2005 in G.R. No.
169199, and ruling that probable cause existed for the re-filing G .R. No. 205972
of the criminal charges for unfair competition under the IP
Code.38 In the meanwhile, in August 2002, upon receiving the
information that Samson and his affiliate entities continuously
In the assailed January 21, 2004 decision,39 the CA dismissed sold and distributed products bearing Caterpillar's Core Marks
Caterpillar's petition for certiorari in CA-G.R. SP No. 75526, viz.: without Caterpillar's consent, the latter requested the
assistance of the Regional Intelligence and Investigation
Petition has no merit. Division of the National Region Public Police (RIID-NCRPO) for
the conduct of an investigation. Subsequently, after the
The mere fact that public respondent denied petitioner's
investigation, the RIID-NCRPO applied for and was granted 16
motion for reconsideration does not justify this petition on the
search warrants against various outlets owned or operated by
ground of abuse of discretion. Grave abuse of discretion means
Samson in Mandaluyong, Quezon City, Manila, Caloocan,
such capricious and whimsical exercise of judgment as is
Makati, Parañaque, Las Piñas, Pampanga and Cavite. The
equivalent to lack of jurisdiction, or, in other words where the
warrants were served on August 27, 2002,42 and as the result
power is exercised in an arbitrary or despotic manner by reason
products bearing Caterpillar's Core Marks were seized and
of passion or personal hostility and it must be so patent and
confiscated. Consequently, on the basis of the search warrants
gross as to amount to an evasion of positive duty or to a virtual
issued by the various courts, Caterpillar again instituted
refusal to perform the duty enjoined or to act at all in
criminal complaints in the DOJ for violation of Section 168.3(a),
contemplation of law. (Benito vs. Comelec, 349 SCRA 705).
in relation to Sections 131.3, 123.l(e) and 170 of the IP Code
Petitioner in this case failed to overcome the burden of against Samson, docketed as LS. Nos. 2002-995 to 2002-997;
showing how public respondent acted with grave abuse of 2002-999 to 2002-1010; and 2002-1036.
discretion in granting private respondent's motion and denying
After the conduct of the preliminary investigation, the DOJ,
his own motion for reconsideration. What is clear is that public
through State Prosecutor Melvin J.Abad, issued a joint
respondent court acted judiciously. A petition for certiorari
resolution dated August 21, 2003 dismissing the complaint
under Rule 65 of the Rules of Court will prosper only if there is
upon finding that there was no probable cause to charge
showing of grave abuse of discretion or an act without or in
Samson with unfair competition.43
excess of jurisdiction on the part of respondent tribunal (Garcia
vs. HRET, 312 SCRA 353). Caterpillar moved for the reconsideration of the dismissal, but
State Prosecutor Abad denied the motion on June 18, 2004.44
Granting arguendo that public respondent court erred in its
ruling, still a petition for certiorari under Rule 65 cannot be The Secretary of Justice affirmed the dismissal of the complaint
justified. Where the court has jurisdiction over the subject through the resolution issued on September 19, 2005,45 and
matter, the orders or decision upon all questions pertaining to denied Caterpillar's motion for reconsideration on December
the cause are orders or decisions within its jurisdiction and 20, 2007.
however erroneous they may be, they cannot be corrected by
certiorari (De Baron vs. Court of Appeals, 368 SCRA 407).
Accordingly, Caterpillar appealed to the CA through a petition
for review under Rule 43, Rules of Court (C.A.-G.R. SP No.
102316).46
On May 8, 2012,47 however, the CA denied due course to
Caterpillar's petition for review, viz.:
WHEREFORE, premises considered, the petition is DENIED
DUE COURSE, and accordingly, DISMISSED.
SO ORDERED.48
The CA opined that an appeal under Rule 43 to assail the
resolution by the Secretary of Justice determining the
existence or non-existence of probable cause was an improper
remedy; and that while it could treat an appeal as a special civil
action for certiorari under Rule 65, it could not do so therein
because the allegations of the petition did not sufficiently show
grave abuse of discretion on the part of the Secretary of Justice
in issuing the assailed resolutions.
Caterpillar filed a motion for reconsideration, but the CA
denied the motion for its lack of merit on February 12, 2013.49
Hence, Caterpillar commenced G.R. No. 205972.
Issues
Caterpillar submits that the CA erred as follows:
G.R. No. 164352
A.
THE COURT OF APPEALS COMMITTED SERIOUS
REVERSIBLE ERROR IN DENYING DUE COURSE TO
CATERPILLAR INC.'S PETITION FOR CERTIORARI.
B.
THE COURT OF APPEALS COMMITTED SERIOUS
REVERSIBLE ERROR IN NOT HOLDING THAT THE ORDER
SUSPENDING PROCEEDINGS IN CRIMINAL CASES NOS. 02-
238 TO 02-243, ON THE BASIS OF AN ALLEGED PREJUDICIAL
QUESTION, WAS CONTRARY TO LAW AND ESTABLISHED
JURISPRUDENCE.
C.
THE HONORABLE COURT OF APPEALS COMMITTED
SERIOUS REVERSIBLE ERROR IN NOT HOLDING THAT A
CRIMINAL COMPLAINT FOR UNFAIR COMPETITION CAN
PROCEED INDEPENDENTLY OF, AND SIMULTANEOUS
WITH, THE CIVIL CASE FOR THE SAME.50
Caterpillar posits that the suspension of proceedings in
Criminal Cases Nos. 02-238 to 02-243 was contrary to Rule 111
of the Rules of Court, Article 33 of the Civil Code on
independent civil actions, and Section 170 of the IP Code, which
specifically provides that the criminal penalties for unfair
competition were independent of the civil and administrative
sanctions imposed by law; that the determination of the lawful
owner of the "CATERPILLAR" trademark in Civil Case No. Q-00-
41446 would not be decisive of the guilt of Samson for unfair
competition in Criminal Cases Nos. 02-238 to 02-243 because
registration was not an element of the crime of unfair
competition; that the civil case sought to enforce Samson's civil
liability arising from the IP Code while the criminal cases would
enforce Samson's liability arising from the crime of unfair
competition; and that the Court already ruled in Samson v.
Daway51 that Civil Case No. Q-00-41446 was an independent
civil action under Article 33 of the Civil Code and, as such, could
proceed independently of the criminal actions.
In his comment,52 Samson counters that the issues of the
lawful and registered owner of the trademark, the true owner
of the goodwill, and whether "CATERPILLAR" was an
internationally well-known mark are intimately related to the
issue of guilt in the criminal actions, the resolution of which
should determine whether or not the criminal actions for unfair
competition could proceed.
G.R. No. 205972
In this appeal, the petitioner interposes that:
THE HONORABLE COURT OF APPEALS ERRED IN
DISMISSING THE PETITIONER'S PETITION FOR REVIEW
SOLELY ON THE GROUND OF AN ALLEGED WRONG
REMEDY, DESPITE PETITIONERS HAVING CLEARLY
ESTABLISHED THAT THE SECRETARY OF JUSTICE ACTED
WITH GRAVE ABUSE OF DISCRETION IN ISSUING THE
RESOLUTIONS DATED 19 SEPTEMBER 2005 AND 20
DECEMBER 2007, AFFIRMING THE FINDINGS OF THE
INVESTIGATING PROSECUTOR THAT NO PROBABLE CAUSE
EXISTS TO CHARGE THE RESPONDENT OF THE CRIME OF
UNFAIR COMPETITION.53
Caterpillar seeks the liberal interpretation of procedural rules in
order to serve the higher interest of substantial justice
following the denial by the CA of its petition for being an
incorrect remedy; and insists that it presented substantial
evidence to warrant a finding of probable cause for unfair
competition against Samson.
In sum, the issues to be resolved in these consolidated cases
are: firstly, whether or not the CA committed a reversible error
in ruling that the trial court a quo did not commit grave abuse
of discretion in suspending the criminal proceedings on account
of a prejudicial question; and, secondly, whether or not the CA
committed reversible error in upholding the decision of the
Secretary of Justice finding that there was no probable cause to
charge Samson with unfair competition.
Rulings of the Court
G.R. No. 164352
The appeal in G.R. No. 164352 is meritorious.
We note, to begin with, that Civil Case No. Q-00-41446, the
civil case filed by Caterpillar in the RTC in Quezon City, was for
unfair competition, damages and cancellation of trademark,
while Criminal Cases Nos. Q-02-108043-44 were the criminal
prosecution of Samson for unfair competition. A common
element of all such cases for unfair competition - civil and
criminal - was fraud. Under Article 33 of the Civil Code, a civil
action entirely separate and distinct from the criminal action
may be brought by the injured party in cases of fraud, and such
civil action shall proceed independently of the criminal
prosecution. In view of its being an independent civil action,
Civil Case No. Q-00-41446 did not operate as a prejudicial
question that justified the suspension of the proceedings in
Criminal Cases Nos. Q-02-108043-44.
In fact, this issue has already been raised in relation to the
suspension of the arraignment of Samson in Criminal Cases
Nos. Q-02-108043-44 in Samson v. Daway,54 and the Court
resolved it against Samson and in favor of Caterpillar thusly:
Anent the second issue, petitioner failed to substantiate his
claim that there was a prejudicial question. In his petition, he
prayed for the reversal of the March 26, 2003 order which
sustained the denial of his motion to suspend arraignment and
other proceedings in Criminal Case Nos. Q-02-108043-44. For
unknown reasons, however, he made no discussion in support
of said prayer in his petition and reply to comment. Neither did
he attach a copy of the complaint in Civil Case No. Q-00-41446
nor quote the pertinent portion thereof to prove the existence
of a prejudicial question.
At any rate, there is no prejudicial question if the civil and the
criminal action can, according to law, proceed independently of
each other. Under Rule 111, Section 3 of the Revised Rules on
Criminal Procedure, in the cases provided in Articles 32, 33, 34
and 2176 of the Civil Code, the independent civil action may be
brought by the offended party. It shall proceed independently
of the criminal action and shall require only a preponderance of
evidence.
In the case at bar, the common element in the acts constituting
unfair competition under Section 168 of R.A. No. 8293 is fraud.
Pursuant to Article 33 of the Civil Code, in cases of defamation,
fraud, and physical injuries, a civil action for damages, entirely
separate and distinct from the criminal action, may be brought
by the injured party. Hence, Civil Case No. Q-00-41446, which
as admitted by private respondent also relate to unfair
competition, is an independent civil action under Article 33 of
the Civil Code. As such, it will not operate as a prejudicial
question that will justify the suspension of the criminal cases at
bar.55 (Bold emphasis supplied)
Secondly, a civil action for damages and cancellation of
trademark cannot be considered a prejudicial question by
which to suspend the proceedings in the criminal cases for
unfair competition. A prejudicial question is that which arises in
a civil case the resolution of which is a logical antecedent of the
issues to be determined in the criminal case. It must appear not
only that the civil case involves facts upon which the criminal
action is based, but also that the resolution of the issues raised
in the civil action will necessarily be determinative of the
criminal case.56 As stated in Librodo v. Judge Coscolluela,
Jr.:57
A prejudicial question is one based on a fact distinct and
separate from the crime but so intimately connected with it
that it determines the guilt or innocence of the accused, and for
it to suspend the criminal action, it must appear not only that
said case involves facts intimately related to those upon which
the criminal prosecution would be based but also that in the
resolution of the issue or issues raised in the civil case, the guilt
or innocence of the accused would necessarily be determined.
It comes into play generally in a situation where a civil action
and a criminal action are both pending and there exists in the
former an issue which must be preemptively resolved before
the criminal action may proceed, because howsoever the issue
raised in the civil action is resolved would be determinative juris
et de jure of the guilt or innocence of the accused in the
criminal case.58 (Bold underscoring supplied for emphasis)
The elements of a prejudicial question are provided in Section 7
of Rule 111, Rules of Court, to wit: (a) a previously instituted
civil action involves an issue similar to or intimately related to
the issue raised in the subsequent criminal action, and (b) the
resolution of such issue determines whether or not the criminal
action may proceed.59
An examination of the nature of the two kinds of cases involved
is necessary to determine whether a prejudicial question
existed.
An action for the cancellation of trademark like Civil Case No.
Q-00-41446 is a remedy available to a person who believes that
he is or will be damaged by the registration of a mark.60 On the
other hand, the criminal actions for unfair competition
(Criminal Cases Nos. Q-02-108043-44) involved the
determination of whether or not Samson had given his goods
the general appearance of the goods of Caterpillar, with the
intent to deceive the public or defraud Caterpillar as his
competitor.61 In the suit for the cancellation of trademark, the
issue of lawful registration should necessarily be determined,
but registration was not a consideration necessary in unfair
competition.62 Indeed, unfair competition is committed if the
effect of the act is "to pass off to the public the goods of one
man as the goods of another;"63 it is independent of
registration. As fittingly put in R.F. & Alexander & Co. v. Ang,64
"one may be declared unfair competitor even if his competing
trade-mark is registered."
Clearly, the determination of the lawful ownership of the
trademark in the civil action was not determinative of whether
or not the criminal actions for unfair competition shall proceed
against Samson.
G.R. No. 205972
The petition for review on certiorari in G.R. No. 205972 is
denied for being bereft of merit.1âwphi1
Firstly, Caterpillar assailed the resolution of the Secretary of
Justice by filing a petition for review under Rule 43 of the Rules
of Court. Such resort to the petition for review under Rule 43
was erroneous,65 and the egregious error warranted the denial
of the appeal. The petition for review under Rule 43 applied to
all appeals to the CA from quasi-judicial agencies or bodies,
particularly those listed in Section 1 of Rule 43. However, the
Secretary of Justice, in the review of the findings of probable
cause by the investigating public prosecutor, was not exercising
a quasi-judicial function, but performing an executive
function.66
Moreover, the courts could intervene in the determination of
probable cause only through the special civil action for
certiorari under Rule 65 of the Rules of Court, not by appeal
through the petition for review under Rule 43. Thus, the CA
could not reverse or undo the findings and conclusions on
probable cause by the Secretary of Justice except upon clear
demonstration of grave abuse of discretion amounting to lack
or excess of jurisdiction committed by the Secretary of
Justice.67 Caterpillar did not so demonstrate.
And, secondly, even discounting the technicalities as to
consider Caterpillar's petition for review as one brought under
Rule 65, the recourse must still fail.
Probable cause for the purpose of filing an information in court
consists in such facts and circumstances as would engender a
well-founded belief that a crime has been committed and the
accused may probably be guilty thereof.68 The determination
of probable cause lies solely within the sound discretion of the
investigating public prosecutor after the conduct of a
preliminary investigation. It is a sound judicial policy to refrain
from interfering with the determination of what constitutes
sufficient and convincing evidence to establish probable cause
for the prosecution of the accused.69 Thus, it is imperative that
by the nature of his office, the public prosecutor cannot be
compelled to file a criminal information in court if he is not
convinced of the sufficiency of the evidence adduced for a
finding of probable cause.70 Neither can he be precluded from
filing an information if he is convinced of the merits of the case.
In not finding probable cause to indict Samson for unfair
competition, State Prosecutor Abad as the investigating public
prosecutor discharged the discretion given to him by the law.
Specifically, he resolved as follows:
It appears from the records that respondent started marketing
his (class 25) products bearing the trademark Caterpillar as
early as 1992. In 1994, respondent caused the registration of
the trademark "Caterpillar With A Triangle Device Beneath The
Letter [A]" with the Intellectual Property Office. Sometime on
June 16, 1997, the IPO issued Certificate of Registration No.
64705 which appears to be valid for twenty (20) years, or up to
June 16, 2017. Upon the strength of this registration,
respondent continued with his business of marketing shoes,
slippers, sandals, boots and similar Class 25 items bearing his
registered trademark "Caterpillar". Under the law, respondent's
operative act of registering his Caterpillar trademark and the
concomitant approval/issuance by the governmental entity
concerned, conferred upon him the exclusive right to use said
trademark unless otherwise declared illegal. There being no
evidence to controvert the fact that respondent's Certificate of
Registration No. 64705 covering Caterpillar trademark was
fraudulently or illegally obtained, it necessarily follows that its
subsequent use and/or being passed on to the public militates
malice or fraudulent intent on the part of respondent.
Otherwise stated and from the facts obtaining, presumption of
regularity lies, both from the standpoint of registration and
use/passing on of the assailed Caterpillar products.
Complainant's argument that respondent may still be held
liable for unfair competition by reason of his having passed on
five (5) other Caterpillar products like "Cat", "Caterpillar", "Cat
and Design", "Walking Machines" and "Track-Type Tractor
Design" is equally difficult to sustain. As may be gleaned from
the records, respondent has been engaged in the sale and
distribution of Caterpillar products since 1992 leading to the
establishment of numerous marketing outlets. As such, it
would be difficult to assail the presumption that respondent
has already established goodwill insofar as his registered
Caterpillar products are concerned. On the other hand,
complainant's registration of the other Caterpillar products
appears to have been caused only in 1995. In this premise,
respondent may be considered as prior user, while the latter, a
subsequent one. Jurisprudence dictates that prior user of the
trademark by one, will controvert the claim by a subsequent
one.71
We reiterate that the full discretionary authority to determine
the existence of probable cause is lodged in the Executive
Branch of the Government, through the public prosecutor, in
the first instance, and the Secretary of Justice, on review. Such
authority is exclusive, and the courts are prohibited from
encroaching on the executive function, unless there is a clear
showing of grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of the public prosecutor or the
Secretary of Justice. As declared in Callo-Claridad v. Esteban:72
A public prosecutor alone determines the sufficiency of
evidence that establishes the probable cause justifying the
filing of a criminal information against the respondent because
the determination of existence of a probable cause is the
function of the public prosecutor. Generally, the public
prosecutor is afforded a wide latitude of discretion in the
conduct of a preliminary investigation. Consequently, it is a
sound judicial policy to refrain from interfering in the conduct
of preliminary investigations, and to just leave to the
Department of Justice the ample latitude of discretion in the
determination of what constitutes sufficient evidence to
establish probable cause for the prosecution of supposed
offenders. Consistent with this policy, courts do not reverse the
Secretary of Justice's findings and conclusions on the matter of
probable cause except in clear cases of grave abuse of
discretion. By way of exception, however, judicial review is
permitted where the respondent in the preliminary
investigation clearly establishes that the public prosecutor
committed grave abuse of discretion, that is, when the public
prosecutor has exercised his discretion in an arbitrary,
capricious, whimsical or despotic manner by reason of passion
or personal hostility, patent and gross enough as to amount to
an evasion of a positive duty or virtual refusal to perform a duty
enjoined by law. Moreover, the trial court may ultimately
resolve the existence or nonexistence of probable cause by
examining the records of the preliminary investigation when
necessary for the orderly administration of justice. Although
policy considerations call for the widest latitude of deference to
the public prosecutor's findings, the courts should never shirk
from exercising their power, when the circumstances warrant,
to determine whether the public prosecutor's findings are
supported by the facts, and by the law.
Relevantly, grave abuse of discretion means such capricious or
whimsical exercise of judgment that is equivalent to lack of
jurisdiction. The abuse of discretion must be grave, as when the
power is exercised in an arbitrary or despotic manner by reason
of passion or personal hostility, and it must be so patent and
gross as to amount to an evasion of a positive duty or to a
virtual refusal to perform the duty enjoined, or to act at all, in
contemplation of law, as to be equivalent to having acted
without jurisdiction.73 Herein, Caterpillar did not show the
grave abuse of discretion on the part of the Secretary of
Justice.
WHEREFORE, the Court GRANTS the petition for review in
G.R. No. 164352; SETS ASIDE the decision promulgated on
January 21, 2004 in CA-G.R. SP No. 75526; DIRECTS the
Regional Trial Court in Muntinlupa City to reinstate Criminal
Cases Nos. Q-02-108043-44 and forthwith try and decide them
without undue delay; DENIES the petition for review on
certiorari in G.R. No. 205972; and ORDERS respondent Manolo
P. Samson to pay the costs of suit.
SO ORDERED.

PERSONALITY FROM BIRTH AND ITS EXCEPIONS
of the motion to dismiss), even if the said child is only "en
ventre de sa mere;" just as a conceived child, even if as yet
unborn, may receive donations as prescribed by Article 742 of
the same Code, and its being ignored by the parent in his
testament may result in preterition of a forced heir that annuls
the institution of the testamentary heir, even if such child
should be born after the death of the testator Article 854, Civil
Code).
lust (as averred in the original complaint in this case)
constitutes a clear violation of the rights of his victim that
entitles her to claim compensation for the damage caused.
Says Article 21 of the Civil Code of the Philippines:
ART. 21. Any person who wilfully causes loss or injury to
another in a manner that is contrary to morals, good customs
or public policy shall compensate the latter for the damage.

QUIMIGING VS ICAO
REYES, J.B.L., J.:
Appeal on points of law from an order of the Court of First
Instance of Zamboanga del Norte (Judge Onofre Sison Abalos,
presiding), in its Civil Case No. 1590, dismissing a complaint for
support and damages, and another order denying amendment
of the same pleading
The events in the court of origin can be summarized as follows:
Appellant, Carmen Quimiguing, assisted by her parents, sued
Felix Icao in the court below. In her complaint it was averred
that the parties were neighbors in Dapitan City, and had close
and confidential relations; that defendant Icao, although
married, succeeded in having carnal intercourse with plaintiff
several times by force and intimidation, and without her
consent; that as a result she became pregnant, despite efforts
and drugs supplied by defendant, and plaintiff had to stop
studying. Hence, she claimed support at P120.00 per month,
damages and attorney's fees.
Duly summoned, defendant Icao moved to dismiss for lack of
cause of action since the complaint did not allege that the child
had been born; and after hearing arguments, the trial judge
sustained defendant's motion and dismissed the complaint.
Thereafter, plaintiff moved to amend the complaint to allege
that as a result of the intercourse, plaintiff had later given birth
to a baby girl; but the court, sustaining defendant's objection,
ruled that no amendment was allowable, since the original
complaint averred no cause of action. Wherefore, the plaintiff
appealed directly to this Court.
We find the appealed orders of the court below to be
untenable. A conceived child, although as yet unborn, is given
by law a provisional personality of its own for all purposes
favorable to it, as explicitly provided in Article 40 of the Civil
Code of the Philippines. The unborn child, therefore, has a right
to support from its progenitors, particularly of the defendant-
appellee (whose paternity is deemed admitted for the purpose
ART. 742. Donations made to conceived and unborn children
may be accepted by those persons who would legally represent
The rule of Article 21 is supported by Article 2219 of the same
them if they were already born.
Code:
ART. 854. The preterition or omission of one, some, or all of the
ART 2219. Moral damages may be recovered in the following
compulsory heirs in the direct line, whether living at the time of
and analogous cases:
the execution of the will or born after the death of the testator,
shall annul the institution of heir; but the devises and legacies (3) Seduction, abduction, rape or other lascivious acts:
shall be valid insofar as they are not inofficious.
(10) Acts and actions referred to in Articles 21, 26, 27, 28 ....
If the omitted compulsory heirs should die before the testator,
the institution shall be effectual, without prejudice to the right Thus, independently of the right to Support of the child she was
of 'representation. carrying, plaintiff herself had a cause of action for damages
under the terms of the complaint; and the order dismissing it
It is thus clear that the lower court's theory that Article 291 of for failure to state a cause of action was doubly in error.
the Civil Code declaring that support is an obligation of parents
and illegitimate children "does not contemplate support to WHEREFORE, the orders under appeal are reversed and set
children as yet unborn," violates Article 40 aforesaid, besides aside. Let the case be remanded to the court of origin for
imposing a condition that nowhere appears in the text of further proceedings conformable to this decision. Costs against
Article 291. It is true that Article 40 prescribing that "the appellee Felix Icao. So ordered.
conceived child shall be considered born for all purposes that
are favorable to it" adds further "provided it be born later with
the conditions specified in the following article" (i.e., that the
foetus be alive at the time it is completely delivered from the
mother's womb). This proviso, however, is not a condition
precedent to the right of the conceived child; for if it were, the
first part of Article 40 would become entirely useless and
ineffective. Manresa, in his Commentaries (5th Ed.) to the
corresponding Article 29 of the Spanish Civil Code, clearly
points this out:
Los derechos atribuidos al nasciturus no son simples
expectativas, ni aun en el sentido tecnico que la moderna
doctrina da a esta figura juridica sino que constituyen un caso
de los propiamente Ilamados 'derechos en estado de pendenci';
el nacimiento del sujeto en las condiciones previstas por el art.
30, no determina el nacimiento de aquellos derechos (que ya
existian de antemano), sino que se trata de un hecho que tiene
efectos declarativos. (1 Manresa, Op. cit., page 271)
A second reason for reversing the orders appealed from is that
for a married man to force a woman not his wife to yield to his

CONTINENTAL STEEL VS MONTANO
CHICO-NAZARIO, J.:
Before Us is a Petition for Review on Certiorari, under Rule 45
of the Rules of Court, assailing the Decision1 dated 27 February
2008 and the Resolution2 dated 9 May 2008 of the Court of
Appeals in CA-G.R. SP No. 101697, affirming the Resolution3
dated 20 November 2007 of respondent Accredited Voluntary
Arbitrator Atty. Allan S. Montaño (Montaño) granting
bereavement leave and other death benefits to Rolando P.
Hortillano (Hortillano), grounded on the death of his unborn
child.
The antecedent facts of the case are as follows:
Hortillano, an employee of petitioner Continental Steel
Manufacturing Corporation (Continental Steel) and a member
of respondent Nagkakaisang Manggagawa ng Centro Steel
Corporation-Solidarity of Trade Unions in the Philippines for
Empowerment and Reforms (Union) filed on 9 January 2006, a
claim for Paternity Leave, Bereavement Leave and Death and
Accident Insurance for dependent, pursuant to the Collective
Bargaining Agreement (CBA) concluded between Continental
and the Union, which reads:
ARTICLE X: LEAVE OF ABSENCE
Section 2. BEREAVEMENT LEAVE—The Company agrees to
grant a bereavement leave with pay to any employee in case of
death of the employee’s legitimate dependent (parents,
spouse, children, brothers and sisters) based on the following:
2.1 Within Metro Manila up to Marilao, Bulacan - 7 days
2.2 Provincial/Outside Metro Manila - 11 days
ARTICLE XVIII: OTHER BENEFITS
Section 4. DEATH AND ACCIDENT INSURANCE—The
Company shall grant death and accidental insurance to the
employee or his family in the following manner:
4.3 DEPENDENTS—Eleven Thousand Five Hundred Fifty Pesos
(Php11,550.00) in case of death of the employees legitimate
dependents (parents, spouse, and children). In case the
employee is single, this benefit covers the legitimate parents,
brothers and sisters only with proper legal document to be
presented (e.g. death certificate).4
The claim was based on the death of Hortillano’s unborn child.
Hortillano’s wife, Marife V. Hortillano, had a premature delivery
on 5 January 2006 while she was in the 38th week of
pregnancy.5 According to the Certificate of Fetal Death dated 7
January 2006, the female fetus died during labor due to fetal
Anoxia secondary to uteroplacental insufficiency.6
Continental Steel immediately granted Hortillano’s claim for
paternity leave but denied his claims for bereavement leave
and other death benefits, consisting of the death and accident
insurance.7
Seeking the reversal of the denial by Continental Steel of
Hortillano’s claims for bereavement and other death benefits,
the Union resorted to the grievance machinery provided in the
CBA. Despite the series of conferences held, the parties still
failed to settle their dispute,8 prompting the Union to file a
Notice to Arbitrate before the National Conciliation and
Mediation Board (NCMB) of the Department of Labor and
Employment (DOLE), National Capital Region (NCR).9 In a
Submission Agreement dated 9 October 2006, the Union and
Continental Steel submitted for voluntary arbitration the sole
issue of whether Hortillano was entitled to bereavement leave
and other death benefits pursuant to Article X, Section 2 and
Article XVIII, Section 4.3 of the CBA.10 The parties mutually
chose Atty. Montaño, an Accredited Voluntary Arbitrator, to
resolve said issue.11
When the preliminary conferences again proved futile in
amicably settling the dispute, the parties proceeded to submit
their respective Position Papers, 12 Replies,13 and Rejoinders14
to Atty. Montaño.
The Union argued that Hortillano was entitled to bereavement
leave and other death benefits pursuant to the CBA. The Union
maintained that Article X, Section 2 and Article XVIII, Section
4.3 of the CBA did not specifically state that the dependent
should have first been born alive or must have acquired juridical
personality so that his/her subsequent death could be covered
by the CBA death benefits. The Union cited cases wherein
employees of MKK Steel Corporation (MKK Steel) and Mayer
Steel Pipe Corporation (Mayer Steel), sister companies of
Continental Steel, in similar situations as Hortillano were able
to receive death benefits under similar provisions of their CBAs.
The Union mentioned in particular the case of Steve L. Dugan
(Dugan), an employee of Mayer Steel, whose wife also
prematurely delivered a fetus, which had already died prior to
the delivery. Dugan was able to receive paternity leave,
bereavement leave, and voluntary contribution under the CBA
between his union and Mayer Steel.15 Dugan’s child was only
24 weeks in the womb and died before labor, as opposed to
Hortillano’s child who was already 37-38 weeks in the womb
and only died during labor.
The Union called attention to the fact that MKK Steel and
Mayer Steel are located in the same compound as Continental
Steel; and the representatives of MKK Steel and Mayer Steel
who signed the CBA with their respective employees’ unions
were the same as the representatives of Continental Steel who
signed the existing CBA with the Union.
Finally, the Union invoked Article 1702 of the Civil Code, which
provides that all doubts in labor legislations and labor contracts
shall be construed in favor of the safety of and decent living for
the laborer.
On the other hand, Continental Steel posited that the express
provision of the CBA did not contemplate the death of an
unborn child, a fetus, without legal personality. It claimed that
there are two elements for the entitlement to the benefits,
namely: (1) death and (2) status as legitimate dependent, none
of which existed in Hortillano’s case. Continental Steel, relying
on Articles 40, 41 and 4216 of the Civil Code, contended that
only one with civil personality could die. Hence, the unborn
child never died because it never acquired juridical personality.
Proceeding from the same line of thought, Continental Steel
reasoned that a fetus that was dead from the moment of
delivery was not a person at all. Hence, the term dependent
could not be applied to a fetus that never acquired juridical
personality. A fetus that was delivered dead could not be
considered a dependent, since it never needed any support, nor
did it ever acquire the right to be supported.
Continental Steel maintained that the wording of the CBA was
clear and unambiguous. Since neither of the parties qualified
the terms used in the CBA, the legally accepted definitions
thereof were deemed automatically accepted by both parties.
The failure of the Union to have unborn child included in the
definition of dependent, as used in the CBA – the death of
whom would have qualified the parent-employee for
bereavement leave and other death benefits – bound the Union
to the legally accepted definition of the latter term.
Continental Steel, lastly, averred that similar cases involving
the employees of its sister companies, MKK Steel and Mayer
Steel, referred to by the Union, were irrelevant and
incompetent evidence, given the separate and distinct
personalities of the companies. Neither could the Union sustain
its claim that the grant of bereavement leave and other death
benefits to the parent-employee for the loss of an unborn child
constituted "company practice."
On 20 November 2007, Atty. Montaño, the appointed
Accredited Voluntary Arbitrator, issued a Resolution17 ruling
that Hortillano was entitled to bereavement leave with pay and
death benefits.
Atty. Montaño identified the elements for entitlement to said
benefits, thus:
This Office declares that for the entitlement of the benefit of
bereavement leave with pay by the covered employees as
provided under Article X, Section 2 of the parties’ CBA, three (3)
indispensable elements must be present: (1) there is "death";
(2) such death must be of employee’s "dependent"; and (3) such
dependent must be "legitimate".
On the otherhand, for the entitlement to benefit for death and
accident insurance as provided under Article XVIII, Section 4,
paragraph (4.3) of the parties’ CBA, four (4) indispensable
elements must be present: (a) there is "death"; (b) such death
must be of employee’s "dependent"; (c) such dependent must
be "legitimate"; and (d) proper legal document to be
presented.18
Atty. Montaño found that there was no dispute that the death
of an employee’s legitimate dependent occurred. The fetus had
the right to be supported by the parents from the very moment
he/she was conceived. The fetus had to rely on another for
support; he/she could not have existed or sustained
himself/herself without the power or aid of someone else,
specifically, his/her mother. Therefore, the fetus was already a
dependent, although he/she died during the labor or delivery.
There was also no question that Hortillano and his wife were
lawfully married, making their dependent, unborn child,
legitimate.
In the end, Atty. Montaño decreed:
WHEREFORE, premises considered, a resolution is hereby
rendered ORDERING [herein petitioner Continental Steel] to
pay Rolando P. Hortillano the amount of Four Thousand Nine
Hundred Thirty-Nine Pesos (₱4,939.00), representing his
bereavement leave pay and the amount of Eleven Thousand
Five Hundred Fifty Pesos (₱11,550.00) representing death
benefits, or a total amount of ₱16,489.00
The complaint against Manuel Sy, however, is ORDERED
DISMISSED for lack of merit.
All other claims are DISMISSED for lack of merit.
Further, parties are hereby ORDERED to faithfully abide with
the herein dispositions.
Aggrieved, Continental Steel filed with the Court of Appeals a
Petition for Review on Certiorari,19 under Section 1, Rule 43 of
the Rules of Court, docketed as CA-G.R. SP No. 101697.
Continental Steel claimed that Atty. Montaño erred in granting
Hortillano’s claims for bereavement leave with pay and other
death benefits because no death of an employee’s dependent
had occurred. The death of a fetus, at whatever stage of
pregnancy, was excluded from the coverage of the CBA since
what was contemplated by the CBA was the death of a legal
person, and not that of a fetus, which did not acquire any
juridical personality. Continental Steel pointed out that its
contention was bolstered by the fact that the term death was
qualified by the phrase legitimate dependent. It asserted that
the status of a child could only be determined upon said child’s
birth, otherwise, no such appellation can be had. Hence, the
conditions sine qua non for Hortillano’s entitlement to
bereavement leave and other death benefits under the CBA
were lacking.
The Court of Appeals, in its Decision dated 27 February 2008,
affirmed Atty. Montaño’s Resolution dated 20 November 2007.
The appellate court interpreted death to mean as follows:
[Herein petitioner Continental Steel’s] exposition on the legal
sense in which the term "death" is used in the CBA fails to
impress the Court, and the same is irrelevant for ascertaining
the purpose, which the grant of bereavement leave and death
benefits thereunder, is intended to serve. While there is no
arguing with [Continental Steel] that the acquisition of civil
personality of a child or fetus is conditioned on being born alive
upon delivery, it does not follow that such event of premature
delivery of a fetus could never be contemplated as a "death" as
to be covered by the CBA provision, undoubtedly an event
causing loss and grief to the affected employee, with whom the
dead fetus stands in a legitimate relation. [Continental Steel]
has proposed a narrow and technical significance to the term
"death of a legitimate dependent" as condition for granting
bereavement leave and death benefits under the CBA.
Following [Continental Steel’s] theory, there can be no
experience of "death" to speak of. The Court, however, does
not share this view. A dead fetus simply cannot be equated
with anything less than "loss of human life", especially for the
expectant parents. In this light, bereavement leave and death
benefits are meant to assuage the employee and the latter’s
immediate family, extend to them solace and support, rather
than an act conferring legal status or personality upon the
unborn child. [Continental Steel’s] insistence that the
certificate of fetal death is for statistical purposes only sadly
misses this crucial point.20
Accordingly, the fallo of the 27 February 2008 Decision of the
Court of Appeals reads:
WHEREFORE, premises considered, the present petition is
hereby DENIED for lack of merit. The assailed Resolution dated
November 20, 2007 of Accredited Voluntary Arbitrator Atty.
Allan S. Montaño is hereby AFFIRMED and UPHELD.
With costs against [herein petitioner Continental Steel].21
In a Resolution22 dated 9 May 2008, the Court of Appeals
denied the Motion for Reconsideration23 of Continental Steel.
Hence, this Petition, in which Continental Steel persistently
argues that the CBA is clear and unambiguous, so that the
literal and legal meaning of death should be applied. Only one
with juridical personality can die and a dead fetus never
acquired a juridical personality.
We are not persuaded.
As Atty. Montaño identified, the elements for bereavement
leave under Article X, Section 2 of the CBA are: (1) death; (2)
the death must be of a dependent, i.e., parent, spouse, child,
brother, or sister, of an employee; and (3) legitimate relations
of the dependent to the employee. The requisites for death and
accident insurance under Article XVIII, Section 4(3) of the CBA
are: (1) death; (2) the death must be of a dependent, who could
be a parent, spouse, or child of a married employee; or a
parent, brother, or sister of a single employee; and (4)
presentation of the proper legal document to prove such death,
e.g., death certificate.
It is worthy to note that despite the repeated assertion of
Continental Steel that the provisions of the CBA are clear and
unambiguous, its fundamental argument for denying
Hortillano’s claim for bereavement leave and other death
benefits rests on the purportedly proper interpretation of the
terms "death" and "dependent" as used in the CBA. If the
provisions of the CBA are indeed clear and unambiguous, then
there is no need to resort to the interpretation or construction
of the same. Moreover, Continental Steel itself admitted that
neither management nor the Union sought to define the
pertinent terms for bereavement leave and other death
benefits during the negotiation of the CBA.
The reliance of Continental Steel on Articles 40, 41 and 42 of
the Civil Code for the legal definition of death is misplaced.
Article 40 provides that a conceived child acquires personality
only when it is born, and Article 41 defines when a child is
considered born. Article 42 plainly states that civil personality is
extinguished by death.
First, the issue of civil personality is not relevant herein. Articles
40, 41 and 42 of the Civil Code on natural persons, must be
applied in relation to Article 37 of the same Code, the very first
of the general provisions on civil personality, which reads:
Art. 37. Juridical capacity, which is the fitness to be the subject
of legal relations, is inherent in every natural person and is lost
only through death. Capacity to act, which is the power to do
acts with legal effect, is acquired and may be lost.
We need not establish civil personality of the unborn child
herein since his/her juridical capacity and capacity to act as a
person are not in issue. It is not a question before us whether
the unborn child acquired any rights or incurred any obligations
prior to his/her death that were passed on to or assumed by the
child’s parents. The rights to bereavement leave and other
death benefits in the instant case pertain directly to the parents
of the unborn child upon the latter’s death.
Second, Sections 40, 41 and 42 of the Civil Code do not provide
at all a definition of death. Moreover, while the Civil Code
expressly provides that civil personality may be extinguished by
death, it does not explicitly state that only those who have
acquired juridical personality could die.
And third, death has been defined as the cessation of life.24
Life is not synonymous with civil personality. One need not
acquire civil personality first before he/she could die. Even a
child inside the womb already has life. No less than the
Constitution recognizes the life of the unborn from
conception,25 that the State must protect equally with the life
of the mother. If the unborn already has life, then the cessation
thereof even prior to the child being delivered, qualifies as
death.
Likewise, the unborn child can be considered a dependent
under the CBA. As Continental Steel itself defines, a dependent
is "one who relies on another for support; one not able to exist
or sustain oneself without the power or aid of someone else."
Under said general definition,26 even an unborn child is a
dependent of its parents. Hortillano’s child could not have
reached 38-39 weeks of its gestational life without depending
upon its mother, Hortillano’s wife, for sustenance. Additionally,
it is explicit in the CBA provisions in question that the
dependent may be the parent, spouse, or child of a married
employee; or the parent, brother, or sister of a single
employee. The CBA did not provide a qualification for the child
dependent, such that the child must have been born or must
have acquired civil personality, as Continental Steel avers.
Without such qualification, then child shall be understood in its
more general sense, which includes the unborn fetus in the
mother’s womb.
The term legitimate merely addresses the dependent child’s
status in relation to his/her parents. In Angeles v. Maglaya,27
we have expounded on who is a legitimate child, viz:
A legitimate child is a product of, and, therefore, implies a valid
and lawful marriage. Remove the element of lawful union and
there is strictly no legitimate filiation between parents and
child. Article 164 of the Family Code cannot be more emphatic
on the matter: "Children conceived or born during the marriage
of the parents are legitimate." (Emphasis ours.)
Conversely, in Briones v. Miguel,28 we identified an illegitimate
child to be as follows:
The fine distinctions among the various types of illegitimate
children have been eliminated in the Family Code. Now, there
are only two classes of children -- legitimate (and those who,
like the legally adopted, have the rights of legitimate children)
and illegitimate. All children conceived and born outside a valid
marriage are illegitimate, unless the law itself gives them
legitimate status. (Emphasis ours.)
It is apparent that according to the Family Code and the afore-
cited jurisprudence, the legitimacy or illegitimacy of a child
attaches upon his/her conception. In the present case, it was
not disputed that Hortillano and his wife were validly married
and that their child was conceived during said marriage, hence,
making said child legitimate upon her conception.1avvphi1
Also incontestable is the fact that Hortillano was able to
comply with the fourth element entitling him to death and
accident insurance under the CBA, i.e., presentation of the
death certificate of his unborn child.
Given the existence of all the requisites for bereavement leave
and other death benefits under the CBA, Hortillano’s claims for
the same should have been granted by Continental Steel.
We emphasize that bereavement leave and other death
benefits are granted to an employee to give aid to, and if
possible, lessen the grief of, the said employee and his family
who suffered the loss of a loved one. It cannot be said that the
parents’ grief and sense of loss arising from the death of their
unborn child, who, in this case, had a gestational life of 38-39
weeks but died during delivery, is any less than that of parents
whose child was born alive but died subsequently.
Being for the benefit of the employee, CBA provisions on
bereavement leave and other death benefits should be
interpreted liberally to give life to the intentions thereof. Time
and again, the Labor Code is specific in enunciating that in case
of doubt in the interpretation of any law or provision affecting
labor, such should be interpreted in favor of labor.29 In the
same way, the CBA and CBA provisions should be interpreted
in favor of labor. In Marcopper Mining v. National Labor
Relations Commission,30 we pronounced:
Finally, petitioner misinterprets the declaration of the Labor
Arbiter in the assailed decision that "when the pendulum of
judgment swings to and fro and the forces are equal on both
sides, the same must be stilled in favor of labor." While
petitioner acknowledges that all doubts in the interpretation of
the Labor Code shall be resolved in favor of labor, it insists that
what is involved-here is the amended CBA which is essentially a
contract between private persons. What petitioner has lost
sight of is the avowed policy of the State, enshrined in our
Constitution, to accord utmost protection and justice to labor,
a policy, we are, likewise, sworn to uphold.
In Philippine Telegraph & Telephone Corporation v. NLRC [183
SCRA 451 (1990)], we categorically stated that:
When conflicting interests of labor and capital are to be
weighed on the scales of social justice, the heavier influence of
the latter should be counter-balanced by sympathy and
compassion the law must accord the underprivileged worker.
Likewise, in Terminal Facilities and Services Corporation v.
NLRC [199 SCRA 265 (1991)], we declared:
Any doubt concerning the rights of labor should be resolved in
its favor pursuant to the social justice policy.
IN VIEW WHEREOF, the Petition is DENIED. The Decision
dated 27 February 2008 and Resolution dated 9 May 2008 of
the Court of Appeals in CA-G.R. SP No. 101697, affirming the
Resolution dated 20 November 2007 of Accredited Voluntary
Arbitrator Atty. Allan S. Montaño, which granted to Rolando P.
Hortillano bereavement leave pay and other death benefits in
the amounts of Four Thousand Nine Hundred Thirty-Nine
Pesos (₱4,939.00) and Eleven Thousand Five Hundred Fifty
Pesos (₱11,550.00), respectively, grounded on the death of his
unborn child, are AFFIRMED. Costs against Continental Steel
Manufacturing Corporation. SO ORDERED.
JURIDICAL PERSONS
MAYOR VS TIU
MENDOZA, J.:
This is a Petition for Review on Certiorari under Rule 45 of the
Rules of Court assailing the October 5, 20111 and September
24, 20122 Resolutions of the Court of Appeals (CA) in CA-G.R.
SP No. 06256, which dismissed the petition filed by Remedios
Tiu (Remedios) and Manuela Azucena Mayor (Manuela) for
procedural infirmities. The said CA petition challenged the
January 20, 20113 and June 10, 20114 Orders of the Regional
Trial Court, Branch 6, Tacloban City (RTC-Br. 6), in Sp. Proc.
No. 2008-05-30, a case for Probate of Last Will and Testament
and Issuance of Letters of Testamentary.
The Antecedents:
On May 25, 2008, Rosario Guy-Juco Villasin Casilan (Rosario),
the widow of the late Primo Villasin (Primo), passed away and
left a holographic Last Will and Testament,5 wherein she
named her sister, Remedios Tiu (Remedios), and her niece,
Manuela Azucena Mayor (Manuela), as executors. Immediately
thereafter, Remedios and Manuela filed a petition for the
probate of Rosario's holographic will6 with prayer for the
issuance of letters testamentary (probate proceedings). The
petition was raffled to the Regional Trial Court, Branch 9,
Tacloban City (RTC-Br. 9) and docketed as Sp. Proc. No. 2008-
05-30. They averred that Rosario left properties valued at
approximately ₱2.5 million.
On May 29, 2008, respondent Damiana Charito Marty (Marty)
claiming to be the adopted daughter of Rosario, filed a petition
for letters of administration before the RTC, Branch 34,
Tacloban City (RTC- Br. 34), docketed as Sp. Proc. No. 2008-05-
32, but it was not given due course because of the probate
proceedings. Per records, this dismissal is subject of a separate
proceeding filed by Marty with the CA Cebu City, docketed as
CA-G.R. SP No. 04003.7
On June 12, 2008, in its Order,8 the RTC-Br. 9 found the
petition for probate of will filed by Remedios and Manuela as
sufficient in form and substance and set the case for hearing.
Consequently, Marty filed her Verified Urgent Manifestation
and Motion,9 dated June 23, 2008, stating that Remedios kept
the decedent Rosario a virtual hostage for the past ten (10)
years and her family was financially dependent on her which led
to the wastage and disposal of the properties owned by her and
her husband, Primo. Marty averred that until the alleged will of
the decedent could be probated and admitted, Remedios and
her ten (10) children had no standing to either possess or
control the properties comprising the estate of the Villasins.
She prayed for the probate court to: 1) order an immediate
inventory of all the properties subject of the proceedings; 2)
direct the tenants of the estate, namely, Mercury Drug and
Chowking, located at Primrose Hotel, to deposit their rentals
with the court; 3) direct Metro bank, P. Burgos Branch, to
freeze the accounts in the name of Rosario, Primrose
Development Corporation (Primrose) or Remedios; and 4) lock
up the Primrose Hotel in order to preserve the property until
final disposition by the court.
On July 8, 2008, Remedios and Manuela filed their
Comment/Opposition10 to the urgent manifestation averring
that Marty was not an adopted child of the Villasins based on a
certification issued by the Office of the Clerk of Court of
Tacloban City, attesting that no record of any adoption
proceedings involving Marty existed in their records. They also
argued that the probate court had no jurisdiction over the
properties mistakenly claimed by Marty as part of Rosario's
estate because these properties were actually owned by, and
titled in the name of, Primrose. Anent the prayer to direct the
tenants to deposit the rentals to the probate court, Remedios
and Manuela countered that the probate court had no
jurisdiction over properties owned by third persons, particularly
by Primrose, the latter having a separate and distinct
personality from the decedent's estate.
In her Reply,11 dated July 15, 2008, Marty cited an order of the
Court of First Instance of Leyte (CF! Leyte) in SP No. 1239,12
claiming that as early as March 3, 1981, the veil of corporate
entity of Primrose was pierced on the ground that it was a
closed family corporation controlled by Rosario after Primo's
death. Thus, Marty alleged that "piercing" was proper in the
case of Rosario's estate because the incorporation of Primrose
was founded on a fraudulent consideration, having been done
in contemplation of Primo's death.
Further, on July 22, 2008, in her Opposition to the Petition for
the Approval of the Will of the Late Rosario Guy-Juco Villasin
Casilan,13 Marty impugned the authenticity of her holographic
will.
Meanwhile, Edwin Tiu (Edwin), a son of Remedios, also filed his
Opposition,14 dated June 13, 2008.
After a protracted exchange of pleadings, the parties submitted
their respective memoranda.
The January 14, 2009 Order
In its January 14, 2009 Order,15 the RTC-Br. 9 granted the
motion of Marty and appointed the OIC Clerk of Court as
special administrator of the Estate. The Probate Court also
ordered Mercury Drug and Chowking to deposit the rental
income to the court and Metrobank to freeze the bank
accounts mentioned in the motion of Marty. The doctrine of
piercing the corporate veil was applied in the case considering
that Rosario had no other properties that comprised her estate
other than Primrose. According to the probate court, for the
best interest of whoever would be adjudged as the legal heirs
of the Estate, it was best to preserve the properties from
dissipation.
On January 22, 2009, Remedios and Manuela filed their Motion
for Inhibition16 on the ground of their loss of trust and
confidence in RTC-Br. 9 Presiding Judge Rogelio C. Sescon
(Judge Sescon) to dispense justice. Later, they also filed their
Motion for Reconsideration Ad Cautelam,17 dated February 3,
2009, arguing that Rosario's estate consisted only of shares of
stock in Primrose and not the corporation itself. Thus, the
probate court could not order the lessees of the corporation to
remit the rentals to the Estate's administrator. With regard to
the appointment of a special administrator, Remedios and
Manuela insisted that it be recalled. They claimed that if ever
there was a need to appoint one, it should be the two of them
because it was the desire of the decedent in the will subject of
the probation proceedings.
In its Order,18 dated March 27, 2009, the RTC-Br. 9 denied the
motion for reconsideration for lack of merit and affirmed its
January 14, 2009 Order. The presiding judge, Judge Sescon,
also granted the motion for inhibition and ordered that the
records of the case be referred to the RTC Executive Judge for
reraffling. The case was later re-raffled to RTC-Br.6, Judge
Alphinor C. Serrano, presiding judge.
Aggrieved by the denial of their motion for reconsideration,
Remedios and Manuela filed a petition for certiorari with the
CA in Cebu City, docketed as CA-G.R. S.P. No. 04254, assailing
the January 14, 2009 and March 27, 2009 Orders of the RTC-Br.
9.19
Ruling of the CA
In its October 16, 2009 Decision,20 the CA reversed the assailed
orders of the RTC Br. 9, except as to the appointment of a
special administrator insofar as this relates to properties
specifically belonging to the "Estate." It held that Primrose had
a personality separate and distinct from the estate of the
decedent and that the probate court had no jurisdiction to
apply the doctrine of piercing the corporate veil.
According to the CA, nowhere in the assailed orders of the
probate court was it stated that its determination of the title of
the questioned properties was only for the purpose of
determining whether such properties ought to be included in
the inventory. When the probate court applied the doctrine of
"piercing," in effect, it adjudicated with finality the ownership
of the properties in favor of the Estate. The CA stated that RTC-
Br. 9 had no jurisdiction to adjudicate ownership of a property
claimed by another based on adverse title; and that questions
like this must be submitted to a court of general jurisdiction
and not to a probate court.
The CA added that assuming that the probate court's
determination on the issue of ownership was merely intended
to be provisional, Marty's contentions still had no merit. The
properties, which she claimed to be part of the estate of
Rosario and over which she claimed co-ownership, comprised
of real properties registered under the Torrens system. As such,
Primrose was considered the owner until the titles to those
properties were nullified in an appropriate ordinary action. The
CA further stated that the RTC erroneously relied on the order
issued by the CFI Leyte in 1981, in the probate proceedings
involving the estate of Primo. Whatever determination the CFI
made at the time regarding the title of the properties was
merely provisional, hence, not conclusive as to the ownership.
By reason of the favorable decision by the CA, Remedios and
Manuela filed their Motion to Partially Revoke the Writ of
Execution Enforcing the January 14, 2009 Order of the
Honorable Court and Manifestation in Compliance with the
October 21, 2009 Order (Ad Cautelam),21 dated October 27,
2009.
In its Order,22 dated November 17, 2009, the RTC-Br. 6
partially granted the motion as it revoked the power of the
special administrator to oversee the day-to-day operations of
Primrose. It also revoked the order with respect to Mercury
Drug and Chowking, reasoning out that the said establishments
dealt with Primrose, which had a personality distinct and
separate from the estate of the decedent. In the said order,
Atty. Blanche A. Salino nominated by oppositors Marty and
Edwin, was appointed special administrator to oversee the day-
to-day operations of the estate. The same order also upheld
the January 14, 2009 Order, as to the conduct and inventory of
all the properties comprising the estate.
This order was not questioned or appealed by the parties.
Omnibus Motion
On September 24, 2010, or almost ten (10) months after the
November 17, 2009 Order of the probate court was issued,
Marty, together with her new counsel, filed her Omnibus
Motion,23 praying for the probate court to: 1) order Remedios
and Manuela to render an accounting of all the properties and
assets comprising the estate of the decedent; 2) deposit or
consign all rental payments or other passive income derived
from the properties comprising the estate; and 3) prohibit the
disbursement of funds comprising the estate of the decedent
without formal motion and approval by the probate court.
Ruling of the RTC-Br. 6
In its January 20, 2011 Order, the RTC-Br. 6 granted Marty's
Omnibus Motion. Although it agreed with the October 16, 2009
CA Decision reversing the January 14, 2009 Order of the RTC-
Br. 9, nonetheless, it acknowledged the urgency and necessity
of appointing a special administrator. According to the probate
court, considering that there was clear evidence of a significant
decrease of Rosario's shares in the outstanding capital stock of
Primrose,24 prudence dictated that an inquiry into the validity
of the transfers should be made. A final determination of this
matter would be outside the limited jurisdiction of the probate
court, but it was likewise settled that the power to institute an
action for the recovery of a property claimed to be part of the
estate was normally lodged with the executor or administrator.
Thus, the probate court disposed:
WHEREFORE, for the reasons aforestated, and so as not to
render moot any action that the special administrator, or the
regular administrator upon the latter's qualification and
appointment, may deem appropriate to take on the matter (i.e.
Whether or not to institute in the name of the estate the
appropriate action for the recovery of the shares of stock), this
Court hereby GRANTS Oppositor Marty's Omnibus Motion,
dated September 24, 2010, and thus hereby:
1. DIRECTS petitioners, either individually or jointly, to: (a)
RENDER AN ACCOUNTING of all the properties and assets
comprising the estate of the decedent that may have come into
their possession; and, (b) DEPOSIT OR CONSIGN all the rentals
payments or such other passive incomes from the properties
and assets registered in the name of Primrose Development
Corporation, including all income derived from the Primrose
Hotel and the lease contracts with Mercury Drug and Chowking
Restaurant, both within fifteen (15) days from receipt of this
Order;
2. DIRECTS the Special Administrator to take possession and
charge of the properties comprising the decedent's estate,
specially those pertaining to the sharesholding of the decedent
in Primrose Development Corporation, to determine whether
or not action for the recovery of the shares of stock supposedly
transferred from the decedent to petitioners Remedios Tiu,
Manuela Azucena Mayor should be instituted in the name of
the estate against the said transferees and to submit a Report
on the foregoing matters to this Court, within fifteen (15) days
from receipt of this Order; and,
3. ORDERS that no funds comprising the estate of the
decedent shall be disbursed without formal Motion therefor,
with the conformity of the Special Administrator, duly
approved by this Court.
SO ORDERED.25 [Underscoring supplied]
The partial motion for reconsideration of the above order filed
by Remedios and Manuela was denied in the other assailed
order of the RTC-Br. 6, dated June 10, 2011.26
Dissatisfied, Remedios and Manuela availed of the special civil
action of certiorari under Rule 65, and filed a petition before the
CA.
Action by the CA
The CA, however, in its October 5, 2011 Resolution,27
dismissed the same based on the following infirmities: 1) there
was no proper proof of service of a copy of the petition on the
respondents which was sent by registered mail; 2) petitioners
failed to indicate on the petition the material date when the
motion for reconsideration was filed; 3) the copy of the assailed
order was not certified true and correct by the officer having
custody of the original copy; and 4) the serial number of the
commission of the notary public, the province-city where he
was commissioned, the office address of the notary public and
the roll of attorney's number were not properly indicated on
the verification and certification of non-forum shopping.
Remedios and Manuela moved for reconsideration of the
assailed CA resolution, but to no avail, as the appellate court
denied the motion in its September 24, 2012 Resolution.
Hence, this petition before the Court, filed only by Manuela as
Remedios had also passed away, and anchored on the
following grounds:
I.
THE HONORABLE COURT OF APPEALS COMMITTED GROSS
AND REVERSIBLE ERROR IN THE APPLICATION OF LAW AND
THE RULES WARRANTING REVIEW WHEN IT MISAPPLIED
SECTION 13, RULE 13 OF THE RULES OF COURT AND
DECLARED THAT THERE WAS NO PROPER PROOF OF
SERVICE BY REGISTERED MAIL.
II.
THE HONORABLE COURT OF APPEALS COMMITTED GROSS
AND REVERSIBLE ERROR IN THE APPLICATION OF LAW AND
THE RULES WARRANTING REVIEW WHEN IT MISAPPLIED
JURISPRUDENCE AND RULE 65 AND IT HELD THAT
PETITIONER MAYOR DID NOT COMPLY WITH THE
MATERIAL DATE RULE.
III.
THE HONORABLE COURT OF APPEALS COMMITTED GROSS
AND REVERSIBLE ERROR IN THE APPLICATION OF LAW AND
THE RULES WARRANTING REVIEW WHEN IT DECLARED
THAT PETITIONER MAYOR FAILED TO COMPLY WITH THE
REQUIREMENT OF SECTION 1, RULE 65 FOR FAILING TO
ATTACH CERTIFIED TRUE COPY OF THE ORDER OF THE
TRIAL COURT.
IV.
THE HONORABLE COURT OF APPEALS COMMITTED GROSS
AND REVERSIBLE ERROR IN THE APPLICATION OF LAW AND
THE RULES WARRANTING REVIEW WHEN IT DECLARED
THAT PETITIONER MAYOR DID NOT COMPLY WITH THE
REQUIREMENT OF VERIFICATION AND CERTIFICATION
AGAINST FORUM SHOPPING.
V.
THE HONORABLE COURT OF APPEALS COMMITTED GROSS
AND REVERSIBLE ERROR IN THE APPLICATION OF LAW AND
THE RULES WARRANTING REVIEW WHEN IT ALLOWED
TECHNICALITIES TO BE USED TO DEFEAT SUBSTANTIAL
RIGHT OF THE PARTIES.
VI.
PETITIONERS HA VE GOOD CAUSE AND A MERITORIOUS
CASE AGAINST HEREIN RESPONDENTS AS PARAGRAPH l(B)
OF THE DISPOSITIVE PORTION OF THE FIRST ASSAILED
ORDER SHOULD HA VE BEEN REVERSED BECAUSE IT
OVERTURNS THE DECISION OF THE COURT OF APPEALS
DATED 16 OCTOBER 2009 WHICH HAS LONG BECOME FINAL
AND EXECUTORY.28
Petitioner Manuela argued that:
1) There was actual compliance with Section 13, Rule 13 of the
Rules of Court. The CA petition was accompanied by a
notarized affidavit of service and filing of registered mail. At the
time the petition was filed, this was the best evidence of the
service. The other registry receipts for the other parties were
also attached to the petition. Further, the available registry
return card was furnished the CA in the motion for
reconsideration.29
2) The failure of the petition to comply with the rule on a
statement of material dates could be excused because the
dates were evident from the records.30
3) The petitioner went to the RTC of Tacloban to secure
certified true copies of the assailed orders. Only the stamped
name of the Clerk of Court, however, appeared thereon,
because the particular branch had no stamp pad which had the
phrase for certification. The branch did not even have a
typewriter in order to affix the phrase on the copies. These
inadequacies could not be attributed to the petitioners.31
4) The lack of information pertaining to the notary public in the
verification and certification against forum-shopping should
not invalidate the same because, again, it was not attributable
to the parties.32
5) Technicalities should never be used to defeat the substantive
rights of a party.33
In its January 23, 2013 Resolution34 the Court ordered the
respondents to file their respective comments. Marty, in her
Comment, insisted that the petitioner failed to comply with the
procedural requirements as stated by the CA.35
In her Reply to Comment,36 petitioner Manuela clarified that
the affidavit of service was executed on August 31, 2011, which
was after the petition was signed by the lawyers and after it
was verified by the petitioner herself. After contesting Marty's
arguments on the alleged procedural infirmities of the petitions
with the CA and this Court, Manuela asserted that the final and
executory October 16, 2009 Decision of the CA already held
that Primrose had a personality separate and distinct from the
estate of decedent Rosario.
Meanwhile, in his Manifestation,37 dated May 29, 2013, Edwin
affirmed that he and Manuela decided to patch up their
differences and agreed to settle amicably. Accordingly, he
manifested that he was withdrawing from the case pursuant to
their agreement.
On June 18, 2014, Manuela filed her Motion for Issuance of
Temporary Restraining Order and Writ of Preliminary
Injunction38 on the ground that a flurry of orders had been
issued by the RTC-Br. 6 in the implementation of the assailed
January 20, 2011 Order, such as the Order,39 dated May 27,
2013, wherein the probate court vaguely ordered "the inventory
of the exact extent of the 'decedent's estate."' Then another
order was issued appointing an auditing firm to conduct an
inventory/audit of the Estate including the rentals and earnings
derived from the lease of Mercury Drug and Chowking
Restaurant, as tenants of Primrose.40 According to petitioner
Manuela, although an inventory of the assets of the decedent
was proper, the probate court ordered an inventory of the
assets of Primrose, a separate and distinct entity. Manuela
asserts that it was clearly in error.
In her Supplement to the Motion for Issuance of Temporary
Restraining Order and Writ of Preliminary Injunction,41 dated
June 17, 2013, Manuela informed the Court that the inventory
and accounting of Primrose would already commence on June
19, 2013.
Marty filed her Opposition,42 dated July 3, 2013, stating that
the petition of Manuela had been rendered moot and academic
as the probate court had declared her as the sole heir of Rosario
and appointed her administrator of the estate. She argued that
an injunctive relief would work injustice to the estate because
of the total assimilation by petitioner of the shareholdings of
the decedent in Primrose and her share in the corporation's
income corresponding to her shareholdings.
Finding that the requisites for preliminary injunctive relief were
present,43 the Court issued the TRO44 in favor of Manuela on
October 14, 2013. At the outset, the Court was convinced that
the rights of Primrose sought to be protected by the grant of
injunctive relief were material and substantial and the TRO was
issued in order to prevent any irreparable damage to a
corporate entity that could arise from the conduct of an
accounting by the court-appointed inventory.
The Court's Ruling
The Court now resolves the subject case by the issuance of a
permanent injunction, as prayed for by petitioner Manuela.
This position is supported by law and jurisprudence, as follows:
First. Artificial persons include (1) a collection or succession of
natural persons forming a corporation; and (2) a collection of
property to which the law attributes the capacity of having
rights and duties. This class of artificial persons is recognized
only to a limited extent in our law. Example is the estate of a
bankrupt or deceased person.45 From this pronouncement, it
can be gleaned that the estate of the deceased person is a
juridical person separate and distinct from the person of the
decedent and any other corporation. This status of an estate
comes about by operation of law. This is in consonance with
the basic tenet under corporation law that a corporation has a
separate personality distinct from its stockholders and from
other corporations to which it may be connected.46
Second. The doctrine of piercing the corporate veil has no
relevant application in this case. Under this doctrine, the court
looks at the corporation as a mere collection of individuals or an
aggregation of persons undertaking business as a group,
disregarding the separate juridical personality of the
corporation unifying the group. Another formulation of this
doctrine is that when two business enterprises are owned,
conducted and controlled by the same parties, both law and
equity will, when necessary to protect the rights of third
parties, disregard the legal fiction that two corporations are
distinct entities and treat them as identical or as one and the
same.47 The purpose behind piercing a corporation's identity is
to remove the barrier between the corporation and the persons
comprising it to thwart the fraudulent and illegal schemes of
those who use the corporate personality as a shield for
undertaking certain proscribed activities.48
Here, instead of holding the decedent's interest in the
corporation separately as a stockholder, the situation was
reversed. Instead, the probate court ordered the lessees of the
corporation to remit rentals to the estate's administrator
without taking note of the fact that the decedent was not the
absolute owner of Primrose but only an owner of shares
thereof. Mere ownership by a single stockholder or by another
corporation of all or nearly all of the capital stocks of a
corporation is not of itself a sufficient reason for disregarding
the fiction of separate corporate personalities.49 Moreover, to
disregard the separate juridical personality of a corporation,
the wrongdoing cannot be presumed, but must be clearly and
convincingly established.50
Third. A probate court is not without limits in the
determination of the scope of property covered in probate
proceedings. In a litany of cases, the Court had defined the
parameters by which a probate court may extend its probing
arms in the determination of the question of title in probate
proceedings. In Pastor, Jr. vs. Court of Appeals,51 the Court
explained that, as a rule, the question of ownership was an
extraneous matter which the probate court could not resolve
with finality. Thus, for the purpose of determining whether a
certain property should, or should not, be included in the
inventory of estate properties, the probate court may pass
upon the title thereto, but such determination is provisional,
not conclusive, and is subject to the final decision in a separate
action to resolve title. It is a well-settled rule that a probate
court or one in charge of proceedings, whether testate or
intestate, cannot adjudicate or determine title to properties
claimed to be part of the estate but which are equally claimed
to belong to outside parties. It can only determine whether
they should, or should not, be included in the inventory or list of
properties to be overseen by the administrator. If there is no
dispute, well and good; but if there is, then the parties, the
administrator and the opposing parties have to resort to an
ordinary action for a final determination of the conflicting
claims of title because the probate court cannot do so.52
In this case, respondent Marty argues that the subject
properties and the parcel of land on which these were erected
should be included in the inventory of Rosario's estate. More
so, the arrears from the rental of these properties were later on
ordered to be remitted to the administrator of the estate
grounded on the allegation that Rosario had no other
properties other than her interests in Primrose. To the Court's
mind, this holding of the probate court was in utter disregard of
the undisputed fact the subject land is registered under the
Torrens system in the name of Primrose, a third person who
may be prejudiced by the orders of the probate court. In Valera
vs. Inserto:53 the Court stated:
xxx, settled is the rule that a Court of First Instance (now
Regional Trial Court), acting as a probate court, exercises but
limited jurisdiction, and thus has no power to take cognizance
of and determine the issue of title to property claimed by a
third person adversely to the decedent, unless the claimant and
all the other parties having legal interest in the property
consent, expressly or impliedly, to the submission of the
question to the probate court for adjudgment, or the interests
of third persons are not thereby prejudiced, the reason for the
exception being that the question of whether or not a particular
matter should be resolved by the Court in the exercise of its
general jurisdiction or of its limited jurisdiction as a special
court (e.g. probate, land registration, etc.), is in reality not a
jurisdictional but in essence of procedural one, involving a
mode of practice which may be waived.
xxx These considerations assume greater cogency where, as
here, the Torrens title to the property is not in the decedent's
names but in others, a situation on which this Court has already
had occasion to rule.54 [Emphasis and underscoring supplied]
Thus, the probate court should have recognized the
incontestability accorded to the Torrens title of Primrose over
Marty's arguments of possible dissipation of properties. In fact,
in the given setting, even evidence purporting to support a
claim of ownership has to yield to the incontestability of a
Torrens title, until after the same has been set aside in the
manner indicated in the law itself. In other words, the existence
of a Torrens title may not be discounted as a mere incident in
special proceedings for the settlement of the estate of
deceased persons. Put clearly, if a property covered by Torrens
title is involved, "the presumptive conclusiveness of such title
should be given due weight, and in the absence of strong
compelling evidence to the contrary, the holder thereof should
be considered as the owner of the property in controversy until
his title is nullified or modified in an appropriate ordinary
action, particularly, when as in the case at bar, possession of
the property itself is in the persons named in the title."55
Additionally, Presidential Decree (P.D.) No. 152956 proscribes a
collateral attack on a Torrens title:
Sec. 48. Certificate not subject to collateral attack. - A
certificate of title shall not be subject to collateral
attack.1âwphi1 It cannot be altered, modified or cancelled
except in a direct proceeding in accordance with law.
In Cuizon vs. Ramolete,57 the property subject of the
controversy was duly registered under the Torrens system. To
this, Court categorically stated:
Having been apprised of the fact that the property in question
was in the possession of third parties and more important,
covered by a transfer certificate of title issued in the name of
such third parties, the respondent court should have denied the
motion of the respondent administrator and excluded the
property in question from the inventory of the property of the
estate. It had no authority to deprive such third persons of their
possession and ownership of the property. 58 xxx [Emphasis
and underscoring supplied]
A perusal of the records of this case would show that that no
compelling evidence was ever presented to substantiate the
position of Marty that Rosario and Primrose were one and the
same, justifying the inclusion of the latter's properties in the
inventory of the decedent's properties. This has remained a
vacant assertion. At most, what Rosario owned were shares of
stock in Primrose. In turn, this boldly underscores the fact that
Primrose is a separate and distinct personality from the estate
of the decedent. Inasmuch as the real properties included in the
inventory of the estate of Rosario are in the possession of, and
are registered in the name of, Primrose, Marty's claims are
bereft of any logical reason and conclusion to pierce the veil of
corporate fiction.
Section 9, Rule 58 of the Rules of Court which provides that "[i]f
after the trial of the action it appears that the applicant is
entitled to have the act or acts complained of permanently
enjoined, the court shall grant a final injunction perpetually
restraining the party or person enjoined from the commission
or continuance of the act or acts or confirming the preliminary
mandatory injunction." Undoubtedly, Primrose stands to suffer
an irreparable injury from the subject order of the probate
court.
WHEREFORE, the petition is GRANTED. The Temporary
Restraining Order, dated June 14, 2013, is hereby made
PERMANENT, effective immediately. The Regional Trial Court,
Branch 6, Tacloban City, is ENJOINED from enforcing and
implementing its January 20, 2011 and June 10, 2011 Orders,
insofar as the corporate properties of Primrose Development
Corporation are concerned, to avert irreparable damage to a
corporate entity, separate and distinct from the Estate of
Rosario Guy-Juco Villasin Casilan.
SO ORDERED.

Fourth. The probate court in this case has not acquired

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

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

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

In the case at bench, the probate court applied the doctrine of

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

Considering the above disquisition, the Court holds that a

permanent and final injunction is in order in accordance with