1

private respondents fully functional right kidney, instead of the left non-functioning
ECOND DIVISION and non-visualizing kidney.

RICO ROMMEL ATIENZA, G.R. No. 177407 The complaint was heard by the [BOM]. After complainant Romeo Sioson
Petitioner, Promulgated: presented his evidence, private respondent Editha Sioson, also named as
- versus - complainant there, filed her formal offer of documentary evidence. Attached to the
February 9, 2011 formal offer of documentary evidence are her Exhibits A to D, which she offered for
BOARD OF MEDICINE and EDITHA SIOSON, the purpose of proving that her kidneys were both in their proper anatomical
Respondents. locations at the time she was operated. She described her exhibits, as follows:

x------------------------------------------------------------------------------------x EXHIBIT A the certified photocopy of the X-ray Request form

dated December 12, 1996, which is also marked as Annex 2 as it
was actually originally the Annex to x x x Dr. Pedro Lantin, IIIs
DECISION counter affidavit filed with the City Prosecutor of Pasig City in
connection with the criminal complaint filed by [Romeo Sioson]
NACHURA, J.: with the said office, on which are handwritten entries which are
the interpretation of the results of the ultrasound examination.
Incidentally, this exhibit happens to be the same as or identical
Before us is a petition for review on certiorari under Rule 45 of the Rules of Court, assailing to the certified photocopy of the document marked as Annex 2
to the Counter-Affidavit dated March 15, 2000, filed by x x x Dr.
the Decision[1] dated September 22, 2006 of the Court of Appeals (CA) in CA-G.R. SP No.
Pedro Lantin, III, on May 4, 2000, with this Honorable Board in
87755. The CA dismissed the petition for certiorari filed by petitioner Rico Rommel Atienza answer to this complaint;

(Atienza), which, in turn, assailed the Orders[2] issued by public respondent Board of EXHIBIT B the certified photo copy of the X-ray request form
dated January 30, 1997, which is also marked as Annex 3 as it
Medicine (BOM) in Administrative Case No. 1882.
was actually likewise originally an Annex to x x x Dr. Pedro
Lantin, IIIs counter-affidavit filed with the Office of the City
Prosecutor of Pasig City in connection with the criminal
The facts, fairly summarized by the appellate court, follow. complaint filed by the herein complainant with the said office,
on which are handwritten entries which are the interpretation
Due to her lumbar pains, private respondent Editha Sioson went to Rizal Medical of the results of the examination. Incidentally, this exhibit
Center (RMC) for check-up on February 4, 1995. Sometime in 1999, due to the happens to be also the same as or identical to the certified
same problem, she was referred to Dr. Pedro Lantin III of RMC who, accordingly, photo copy of the document marked as Annex 3 which is
ordered several diagnostic laboratory tests. The tests revealed that her right kidney likewise dated January 30, 1997, which is appended as such
is normal. It was ascertained, however, that her left kidney is non-functioning and Annex 3 to the counter-affidavit dated March 15, 2000, filed by
non-visualizing. Thus, she underwent kidney operation in September, 1999. x x x Dr. Pedro Lantin, III on May 4, 2000, with this Honorable
Board in answer to this complaint.
On February 18, 2000, private respondents husband, Romeo Sioson (as
complainant), filed a complaint for gross negligence and/or incompetence before EXHIBIT C the certified photocopy of the X-ray request form
the [BOM] against the doctors who allegedly participated in the fateful kidney dated March 16, 1996, which is also marked as Annex 4, on
operation, namely: Dr. Judd dela Vega, Dr. Pedro Lantin, III, Dr. Gerardo Antonio which are handwritten entries which are the interpretation of
Florendo and petitioner Rico Rommel Atienza. the results of the examination.

It was alleged in the complaint that the gross negligence and/or incompetence EXHIBIT D the certified photocopy of the X-ray request form
committed by the said doctors, including petitioner, consists of the removal of dated May 20, 1999, which is also marked as Annex 16, on
which are handwritten entries which are the interpretation of
 2

the results of the examination. Incidentally, this exhibit appears

to be the draft of the typewritten final report of the same Disagreeing with the BOM, and as previously adverted to, Atienza filed a petition
examination which is the document appended as Annexes 4 for certiorari with the CA, assailing the BOMs Orders which admitted Editha Siosons (Edithas)
and 1 respectively to the counter-affidavits filed by x x x Dr.
Judd dela Vega and Dr. Pedro Lantin, III in answer to the Formal Offer of Documentary Evidence. The CA dismissed the petition for certiorari for lack
complaint. In the case of Dr. dela Vega however, the document
of merit.
which is marked as Annex 4 is not a certified photocopy, while
in the case of Dr. Lantin, the document marked as Annex 1 is a
certified photocopy. Both documents are of the same date and
typewritten contents are the same as that which are written on Hence, this recourse positing the following issues:
Exhibit D.
I. PROCEDURAL ISSUE:
Petitioner filed his comments/objections to private respondents [Editha Siosons]
formal offer of exhibits. He alleged that said exhibits are inadmissible because the
WHETHER PETITIONER ATIENZA AVAILED OF THE PROPER REMEDY WHEN
same are mere photocopies, not properly identified and authenticated, and
HE FILED THE PETITION FOR CERTIORARI DATED 06 DECEMBER 2004
intended to establish matters which are hearsay. He added that the exhibits are
WITH THE COURT OF APPEALS UNDER RULE 65 OF THE RULES OF COURT
incompetent to prove the purpose for which they are offered.
TO ASSAIL THE ORDERS DATED 26 MAY 2004 AND 08 OCTOBER 2004 OF
RESPONDENT BOARD.
Dispositions of the Board of
Medicine
II. SUBSTANTIVE ISSUE:
The formal offer of documentary exhibits of private respondent [Editha Sioson] was
WHETHER THE COURT OF APPEALS COMMITTED GRAVE REVERSIBLE
admitted by the [BOM] per its Order dated May 26, 2004. It reads:
ERROR AND DECIDED A QUESTION OF SUBSTANCE IN A WAY NOT IN
ACCORDANCE WITH LAW AND THE APPLICABLE DECISIONS OF THE
The Formal Offer of Documentary Evidence of [Romeo Sioson], the
HONORABLE COURT WHEN IT UPHELD THE ADMISSION OF
Comments/Objections of [herein petitioner] Atienza, [therein
INCOMPETENT AND INADMISSIBLE EVIDENCE BY RESPONDENT BOARD,
respondents] De la Vega and Lantin, and the Manifestation of [therein]
WHICH CAN RESULT IN THE DEPRIVATION OF PROFESSIONAL LICENSE A
respondent Florendo are hereby ADMITTED by the [BOM] for whatever
PROPERTY RIGHT OR ONES LIVELIHOOD.[4]
purpose they may serve in the resolution of this case.

Let the hearing be set on July 19, 2004 all at 1:30 p.m. for the reception
of the evidence of the respondents. We find no reason to depart from the ruling of the CA.

SO ORDERED.
Petitioner is correct when he asserts that a petition for certiorari is the proper remedy to
Petitioner moved for reconsideration of the abovementioned Order basically on
the same reasons stated in his comment/objections to the formal offer of exhibits. assail the Orders of the BOM, admitting in evidence the exhibits of Editha. As the assailed

The [BOM] denied the motion for reconsideration of petitioner in its Order dated Orders were interlocutory, these cannot be the subject of an appeal separate from the
October 8, 2004. It concluded that it should first admit the evidence being offered judgment that completely or finally disposes of the case.[5] At that stage, where there is no
so that it can determine its probative value when it decides the case. According to
the Board, it can determine whether the evidence is relevant or not if it will take a appeal, or any plain, speedy, and adequate remedy in the ordinary course of law, the only
look at it through the process of admission. x x x.[3]
and remaining remedy left to petitioner is a petition for certiorari under Rule 65 of the Rules
 3

of Court on the ground of grave abuse of discretion amounting to lack or excess of From the foregoing, we emphasize the distinction between the admissibility of evidence and

jurisdiction. the probative weight to be accorded the same pieces of evidence. PNOC Shipping and

Transport Corporation v. Court of Appeals[9] teaches:

However, the writ of certiorari will not issue absent a showing that the BOM has acted
Admissibility of evidence refers to the question of whether or not the
without or in excess of jurisdiction or with grave abuse of discretion. Embedded in the CAs circumstance (or evidence) is to be considered at all. On the other hand,
finding that the BOM did not exceed its jurisdiction or act in grave abuse of discretion is the the probative value of evidence refers to the question of whether or not
it proves an issue.
issue of whether the exhibits of Editha contained in her Formal Offer of Documentary

Evidence are inadmissible.

Second, petitioners insistence that the admission of Edithas exhibits violated his substantive

rights leading to the loss of his medical license is misplaced. Petitioner mistakenly relies on
Petitioner argues that the exhibits formally offered in evidence by Editha: (1) violate the best
Section 20, Article I of the Professional Regulation Commission Rules of Procedure, which
evidence rule; (2) have not been properly identified and authenticated; (3) are completely
reads:
hearsay; and (4) are incompetent to prove their purpose. Thus, petitioner contends that the

exhibits are inadmissible evidence.

Section 20. Administrative investigation shall be conducted in accordance
with these Rules. The Rules of Court shall only apply in these proceedings
by analogy or on a suppletory character and whenever practicable and
We disagree.
convenient. Technical errors in the admission of evidence which do not
prejudice the substantive rights of either party shall not vitiate the
proceedings.[10]
To begin with, it is well-settled that the rules of evidence are not strictly applied in

proceedings before administrative bodies such as the BOM.[6] Although trial courts are
As pointed out by the appellate court, the admission of the exhibits did not prejudice the
enjoined to observe strict enforcement of the rules of evidence, [7] in connection with
substantive rights of petitioner because, at any rate, the fact sought to be proved thereby,
evidence which may appear to be of doubtful relevancy, incompetency, or admissibility, we
that the two kidneys of Editha were in their proper anatomical locations at the time she was
have held that:
operated on, is presumed under Section 3, Rule 131 of the Rules of Court:

[I]t is the safest policy to be liberal, not rejecting them on doubtful or

technical grounds, but admitting them unless plainly irrelevant, Sec. 3. Disputable presumptions. The following presumptions are
immaterial or incompetent, for the reason that their rejection places satisfactory if uncontradicted, but may be contradicted and overcome by
them beyond the consideration of the court, if they are thereafter found other evidence:
relevant or competent; on the other hand, their admission, if they turn
out later to be irrelevant or incompetent, can easily be remedied by (y) That things have happened according to the ordinary course of nature
completely discarding them or ignoring them.[8] and the ordinary habits of life.
 4

(a) When the original has been lost or destroyed, or cannot be produced
The exhibits are certified photocopies of X-ray Request Forms dated December 12, 1996, in court, without bad faith on the part of the offeror;
January 30, 1997, March 16, 1996, and May 20, 1999, filed in connection with Edithas
(b) When the original is in the custody or under the control of the party
medical case. The documents contain handwritten entries interpreting the results of the against whom the evidence is offered, and the latter fails to produce it
after reasonable notice;
examination. These exhibits were actually attached as annexes to Dr. Pedro Lantin IIIs

counter affidavit filed with the Office of the City Prosecutor of Pasig City, which was (c) When the original consists of numerous accounts or other documents
which cannot be examined in court without great loss of time and the
investigating the criminal complaint for negligence filed by Editha against the doctors of Rizal fact sought to be established from them is only the general result of the
whole; and
Medical Center (RMC) who handled her surgical procedure. To lay the predicate for her case,

Editha offered the exhibits in evidence to prove that her kidneys were both in their proper (d) When the original is a public record in the custody of a public officer
or is recorded in a public office.
anatomical locations at the time of her operation.

The fact sought to be established by the admission of Edithas exhibits, that her kidneys were The subject of inquiry in this case is whether respondent doctors before the BOM are liable

both in their proper anatomical locations at the time of her operation, need not be proved as for gross negligence in removing the right functioning kidney of Editha instead of the left

it is covered by mandatory judicial notice.[11] non-functioning kidney, not the proper anatomical locations of Edithas kidneys. As previously

discussed, the proper anatomical locations of Edithas kidneys at the time of her operation at

Unquestionably, the rules of evidence are merely the means for ascertaining the truth the RMC may be established not only through the exhibits offered in evidence.

respecting a matter of fact.[12] Thus, they likewise provide for some facts which are
established and need not be proved, such as those covered by judicial notice, both Finally, these exhibits do not constitute hearsay evidence of the anatomical locations of

mandatory and discretionary.[13] Laws of nature involving the physical sciences, specifically Edithas kidneys. To further drive home the point, the anatomical positions, whether left or

biology,[14] include the structural make-up and composition of living things such as human right, of Edithas kidneys, and the removal of one or both, may still be established through a

beings. In this case, we may take judicial notice that Edithas kidneys before, and at the time belated ultrasound or x-ray of her abdominal area.

of, her operation, as with most human beings, were in their proper anatomical locations.

Third, contrary to the assertion of petitioner, the best evidence rule is inapplicable. Section 3 In fact, the introduction of secondary evidence, such as copies of the exhibits, is

of Rule 130 provides: allowed.[15] Witness Dr. Nancy Aquino testified that the Records Office of RMC no longer had

the originals of the exhibits because [it] transferred from the previous building, x x x to the
1. Best Evidence Rule new building.[16] Ultimately, since the originals cannot be produced, the BOM properly

Sec. 3. Original document must be produced; exceptions. When the admitted Edithas formal offer of evidence and, thereafter, the BOM shall determine the
subject of inquiry is the contents of a document, no evidence shall be
probative value thereof when it decides the case.
admissible other than the original document itself, except in the
following cases:
 5

Held:
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No.

87755 is AFFIRMED. Costs against petitioner. No. Petition denied. To begin with, it is well-settled that the rules of evidence are not strictly
applied in proceedings before administrative bodies such as the BOM. Although trial courts
are enjoined to observe strict enforcement of the rules of evidence, in connection with
SO ORDERED.
Facts: evidence which may appear to be of doubtful relevancy, incompetency, or admissibility, we
have held that, “it is the safest policy to be liberal, not rejecting them on doubtful or
1. Due to her lumbar pains, private respondent Editha Sioson went to Rizal Medical Center technical grounds, but admitting them unless plainly irrelevant, immaterial or incompetent,
(RMC) for check-up on February 1995. for the reason that their rejection places them beyond the consideration of the court, if they
are thereafter found relevant or competent; on the other hand, their admission, if they turn
2. Sometime in 1999, due to the same problem, she was referred to Dr. Pedro Lantin III of out later to be irrelevant or incompetent, can easily be remedied by completely discarding
RMC who, accordingly, ordered several diagnostic laboratory tests. She underwent kidney them or ignoring them.”
operation after the tests revealed that her left kidney is non-functioning and non-visualizing.
Admissibility of evidence refers to the question of whether or not the circumstance (or
3. Private respondent’s husband Romeo Sioson then filed a complaint for gross negligence evidence) is to be considered at all. On the other hand, the probative value of evidence refers
and/or incompetence before the Board of Medicine for the removal of Editha’s fully to the question of whether or not it proves an issue.
functional right kidney, instead of the left, against the doctors who allegedly participated in
the kidney operation, namely: Dr. Judd dela Vega, Dr. Pedro Lantin, III, Dr. Gerardo Antonio Second, petitioner’s insistence that the admission of Editha’s exhibits violated his substantive
Florendo and petitioner Rico Rommel Atienza. rights leading to the loss of his medical license is misplaced in light of Section 20, Article I of
the Professional Regulation Commission Rules of Procedure. As pointed out by the appellate
4. After Romeo Sioson presented his evidence, Editha filed her formal offer of documentary court, the admission of the exhibits did not prejudice the substantive rights of petitioner
evidence, which consisted of certified photocopies of X-Ray request forms where because, at any rate, the fact sought to be proved thereby, that the two kidneys of Editha
interpretation of the ultrasound results were written, for the purpose of proving that her were in their proper anatomical locations at the time she was operated on, is presumed
kidneys were both in their proper anatomical locations at the time she was operated. under Section 3, Rule 131 of the Rules of Court on Disputable presumptions.

5. Petitioner filed his comments/objections to Editha’s formal offer of exhibits, alleging that The exhibits are certified photocopies of X-ray Request Forms filed in connection with
said exhibits are inadmissible because the same are mere photocopies, not properly Editha’s medical case, which contained handwritten entries interpreting the results of the
identified and authenticated, intended to establish matters which are hearsay, and examination. The fact sought to be established by the admission of Editha’s exhibits, that her
incompetent to prove the purpose for which they are offered. “kidneys were both in their proper anatomical locations at the time” of her operation, need
not be proved as it is covered by mandatory judicial notice. These exhibits do not constitute
6. The formal offer of documentary exhibits of private respondent was admitted by the BOM. hearsay evidence of the anatomical locations of Editha’s kidneys because the position and
Petitioner moved for reconsideration of the Order, which was denied on the ground that removal may still be established through a belated ultrasound or x-ray of her abdominal
BOM should first admit the evidence being offered so that it can determine its probative area.
value when it decides the case, and later on determine whether the evidence is relevant or
not. Contrary to the assertion of petitioner, the best evidence rule is also inapplicable. Section 3
of Rule 130 provides:
7. Disagreeing with the BOM, Atienza filed a petition for certiorari with the CA. The CA
dismissed the petition for certiorari for lack of merit. Hence, the present petition for review 1. Best Evidence Rule
on certiorari.
Sec. 3. Original document must be produced; exceptions. – When the subject of inquiry is the
Issue: W/N the exhibits are inadmissible in evidence contents of a document, no evidence shall be admissible other than the original document
itself, except in the following cases:
 6

(a) When the original has been lost or destroyed, or cannot be produced in court, without The Board of Medicine admitted the formal offer despite the objection of herein petitioner.
bad faith on the part of the offeror; Petitioner contends that the documentary evidence offered were inadmissible as it were
incompetent. Further, he alleged that the same documents were not properly identified and
(b) When the original is in the custody or under the control of the party against whom the authenticated, violate the best evidence rule and his substantive rights, and are completely
evidence is offered, and the latter fails to produce it after reasonable notice; hearsay.

(c) When the original consists of numerous accounts or other documents which cannot be Issues:
examined in court without great loss of time and the fact sought to be established from them
is only the general result of the whole; and 1. Whether the exhibits are inadmissible evidence on the ground that it violates the best
evidence rule.
(d) When the original is a public record in the custody of a public officer or is recorded in a
public office. 2. Whether the exhibits are inadmissible evidence on the ground that they have not been
properly identified and authenticated.
The subject of inquiry in this case is whether respondent doctors before the BOM are liable
for gross negligence in removing the right functioning kidney of Editha instead of the left 3. Whether the exhibits are inadmissible evidence on the ground that it is completely
non-functioning kidney, not the proper anatomical locations of Editha’s kidneys. As hearsay.
previously discussed, the proper anatomical locations of Editha’s kidneys at the time of her
operation at the RMC may be established not only through the exhibits offered in evidence. 4. Whether the admission of the documents violated the substantive rights of the
petitioner.
In fact, the introduction of secondary evidence, such as copies of the exhibits, is allowed,
especially as one of the witnesses testified that the Records Office of RMC no longer had the Ruling:
originals of the exhibits “because [it] transferred from the previous building, x x x to the new
1. No. The subject of the inquiry in this case is whether the doctors are liable for gross
building” and ultimately, the originals cannot be produced.
negligence in removing the right functioning kidney of Editha instead of the left non-
Facts: functioning kidney, not the proper anatomical locations of Editha’s kidneys. The proper
anatomical locations of Editha’s kidneys at the time of her operation at the RMC may be
Private respondent went to Rizal Medical Center to submit for a check up due to her lumbar established not only through the exhibits offered in evidence.
pains. Her diagnostic laboratory test results revealed that her right kidney was normal while
her left kidney was non-functioning and non-visualizing. Hence, she underwent kidney In fact, the introduction of secondary evidence is allowed. Section 3, Rule 130 provides that
operation under the care of the four physicians namely: Dr. Judd dela Vega, Dr. Pedro Lantin when the subject of the inquiry is the contents of the document, no evidence shall be
III, Dr. Gerardo Antonio and petitioner Dr. Rico Rommel Atienza. admissible other than the original document itself, except when the original has been lost or
destroyed, or cannot be produced in court without bad faith on the offeror. Since the original
The said physicians removed her fully functioning right kidney instead of the left non- documents cannot be produced based on the testimony of Dr. Aquino BOM properly
functioning and non-visualizing kidney. Due to their gross negligence and incompetence, admitted Editha’s formal offer of evidence, and thereafter, the BOM shall determine the
private respondent filed a complaint against the four doctors before the Board of Medicine. probative value thereof when it decides the case.
Private respondent therein offered four certified photocopies as her documentary evidence
to prove that her kidneys were both in their proper anatomical locations at the time that she 2. No, the documentary evidence were properly identified and authenticated. The records
was operated. show that the exhibits offered by private respondent were the same evidence attached in
Doctor Lantin's counter-affidavit filed before the Office of the City Prosecutor in answer to
the criminal complaint of the respondent. To lay the predicate for her case, private
respondent offered the exhibits in evidence to prove that her kidneys were both in their
proper anatomical locations at the time of her operation.
 7

3. No, these exhibits do not constitute hearsay evidence. The anatomical positions
whether left or right, of Editha’s kidneys, and the removal of one or both, may still be
established through a belated ultrasound or x-ray of her abdominal area.

4. No, petitioner’s substantive rights were not violated when the documentary evidence
were admitted. The fact sought to be proved by the exhibits that the two kidneys of Editha
were in their proper anatomical locations at the time she was operated on is presumed
under Section 3 of Rule 131 of the Rules of Court which provides that things have happened
according to the ordinary course of nature and the ordinary habits of life.

The fact sought to be established by the admission of the respondent’s exhibit need not be
proved as it is covered by mandatory judicial notice. Laws of nature involving the physical
science, specifically biology include the structural make-up and composition of living things
such as human beings in which the court may take judicial notice.
 8

EN BANC 3. That claiming that the reported announcement of the Executive Department on the lifting
of foreign exchange restrictions by two newspapers which are reputable and of national
A.M. No. RTJ-92-876 September 19, 1994 circulation had the effect of repealing Central Bank Circular No. 960, as allegedly supported
by Supreme Court decisions . . ., the Court contended that it was deprived of jurisdiction,
and, therefore, motu, prop(r)io had to dismiss all the eleven cases aforementioned "for not
STATE PROSECUTORS, complainants,
to do so opens this Court to charges of trying cases over which it has no more jurisdiction;"
vs.
JUDGE MANUEL T. MURO, Regional Trial Court, Branch 54, Manila, respondent.
4. That in dismissing aforecited cases on August 13, 1992 on the basis of a Central Bank
Circular or Monetary Board Resolution which as of date hereof, has not even been officially
PER CURIAM:
issued, and basing his Order/decision on a mere newspaper account of the advance
announcement made by the President of the said fact of lifting or liberalizing foreign
In assaying the requisite norms for qualifications and eminence of a magistrate, legal exchange controls, respondent judge acted prematurely and in indecent haste, as he had no
authorities place a premium on how he has complied with his continuing duty to know the way of determining the full intent of the new CB Circular or Monetary Board resolution, and
law. A quality thus considered essential to the judicial character is that of "a man of learning whether the same provided for exception, as in the case of persons who had pending
who spends tirelessly the weary hours after midnight acquainting himself with the great body criminal cases before the courts for violations of Central Bank Circulars and/or regulations
of traditions and the learning of the law; is profoundly learned in all the learning of the law; previously issued on the matter;
and knows how to use that learning." 1
5. That respondent Judge's arrogant and cavalier posture in taking judicial notice purportedly
Obviously, it is the primary duty of a judge, which he owes to the public and to the legal as a matter of public knowledge a mere newspaper account that the President had
profession, to know the very law he is supposed to apply to a given controversy. He is called announced the lifting of foreign exchange restrictions as basis for his assailed order of
upon to exhibit more than just a cursory acquaintance with the statutes and procedural dismissal is highly irregular, erroneous and misplaced. For the respondent judge to take
rules. Party litigants will have great faith in the administration of justice if judges cannot judicial notice thereof even before it is officially released by the Central Bank and its full text
justly be accused of apparent deficiency in their grasp of the legal principles. For, service in published as required by law to be effective shows his precipitate action in utter disregard of
the judiciary means a continuous study and research on the law from beginning to end. 2 the fundamental precept of due process which the People is also entitled to and exposes his
gross ignorance of the law, thereby tarnishing public confidence in the integrity of the
In a letter-complaint 3 dated August 19, 1992, respondent Judge Manuel T. Muro of the judiciary. How can the Honorable Judge take judicial notice of something which has not yet
Regional Trial Court (RTC) of Manila, Branch 54, was charged by State Prosecutors Nilo C. come into force and the contents, shape and tenor of which have not yet been published and
Mariano, George C. Dee and Paterno V. Tac-an with ignorance of the law, grave misconduct ascertained to be the basis of judicial action? The Honorable Judge had miserably failed to
and violations of Rules 2.01, 3.01 and 3.02 of the Code of Judicial Conduct, committed as "endeavor diligently to ascertain the facts" in the case at bar contrary to Rule 3.02 of the
follows: Code of Judicial Conduct constituting Grave Misconduct;

1. That on August 13, 1992, respondent judge issued an Order dismissing eleven (11) cases 6. That respondent Judge did not even ha(ve) the prudence of requiring first the comment of
(docketed as Crim. Cases Nos. 92-101959 to 92- 101969, inclusive) filed by the undersigned the prosecution on the effect of aforesaid Central Bank Circular/Monetary Board resolution
complainant prosecutors (members of the DOJ Panel of Prosecutors) against the accused on the pending cases before dismissing the same, thereby denying the Government of its
Mrs. Imelda Romualdez Marcos, for Violation of Central Bank Foreign Exchange Restrictions, right to due process;
as consolidated in CB Circular No. 960, in relation to the penal provisions of Sec. 34 of R.A.
265, as amended, . . .; 7. That the lightning speed with which respondent Judge acted to dismiss the cases may be
gleaned from the fact that such precipitate action was undertaken despite already scheduled
2. That respondent Judge issued his Order solely on the basis of newspaper reports (August continuation of trial dates set in the order of the court (the prosecution having started
11, 1992 issues of the Philippine Daily Inquirer and the Daily Globe) concerning the presenting its evidence . . .) dated August 11, 1992 to wit: August 31, September 3, 10, 21, &
announcement on August 10, 1992 by the President of the Philippines of the lifting by the 23 and October 1, 1992, all at 9:30 o'clock in the morning, in brazen disregard of all notions
government of all foreign exchange restrictions and the arrival at such decision by the of fair play, thereby depriving the Government of its right to be heard, and clearly exposing
Monetary Board as per statement of Central Bank Governor Jose Cuisia; his bias and partiality; and
 9

8. That, in fact, the motive of respondent Judge in dismissing the case without even waiting Finally, respondent judge asseverates that complainants who are officers of the Department
for a motion to quash filed by the counsel for accused has even placed his dismissal Order of Justice, violated Section 6, Rule 140 of the Rules of Court which provides that "proceedings
suspect. against judges of first instance shall be private and confidential" when they caused to be
published in the newspapers the filing of the present administrative case against him; and he
Pursuant to a resolution of this Court dated September 8, 1992, respondent judge filed his emphasizes the fact that he had to immediately resolve a simple and pure legal matter in
comment, 4 contending,inter alia, that there was no need to await publication of the Central consonance with the admonition of the Supreme Court for speedy disposition of cases.
Bank (CB) circular repealing the existing law on foreign exchange controls for the simple
reason that the public announcement made by the President in several newspapers of In their reply 5 and supplemental reply, 6 complainants aver that although the saving clause
general circulation lifting foreign exchange controls was total, absolute, without qualification, under Section 16 of CB Circular No. 1353 made specific reference to CB Circular No. 1318, it
and was immediately effective; that having acted only on the basis of such announcement, will be noted that Section 111 of Circular No. 1318, which contains a saving clause
he cannot be blamed for relying on the erroneous statement of the President that the new substantially similar to that of the new circular, in turn refers to and includes Circular No.
foreign exchange rules rendered moot and academic the cases filed against Mrs. Marcos, and 960. Hence, whether under Circular No. 1318 or Circular No. 1353, pending cases involving
which was corrected only on August 17, 1992 but published in the newspapers on August 18, violations of Circular No. 960 are excepted from the coverage thereof. Further, it is alleged
1992, and only after respondent judge had issued his order of dismissal dated August 13, that the precipitate dismissal of the eleven cases, without according the prosecution the
1992; that the President was ill-advised by his advisers and, instead of rescuing the Chief opportunity to file a motion to quash or a comment, or even to show cause why the cases
Executive from embarrassment by assuming responsibility for errors in the latter's against accused Imelda R. Marcos should not be dismissed, is clearly reflective of
announcement, they chose to toss the blame for the consequence of their failures to respondent's partiality and bad faith. In effect, respondent judge acted as if he were the
respondent judge who merely acted on the basis of the announcements of the President advocate of the accused.
which had become of public knowledge; that the "saving clause" under CB Circular No. 1353
specifically refers only to pending actions or investigations involving violations of CB Circular On December 9, 1993, this Court issued a resolution referring the complaint to the Office of
No. 1318, whereas the eleven cases dismissed involved charges for violations of CB Circular the Court Administrator for evaluation, report and recommendation, pursuant to Section 7,
No. 960, hence the accused cannot be tried and convicted under a law different from that Rule 140 of the Rules of Court, as revised, there being no factual issues involved. The
under which she was charged; that assuming that respondent judge erred in issuing the order corresponding report and recommendation, 7 dated February 14, 1994, was submitted by
of dismissal, the proper remedy should have been an appeal therefrom but definitely not an Deputy Court Administrator Juanito A. Bernad, with the approval of Court Administrator
administrative complaint for his dismissal; that a mistake committed by a judge should not Ernani Cruz-Paño.
necessarily be imputed as ignorance of the law; and that a "court can reverse or modify a
doctrine but it does not show ignorance of the justices or judges whose decisions were
The questioned order 8 of respondent judge reads as follows:
reversed or modified" because "even doctrines initiated by the Supreme Court are later
reversed, so how much more for the lower courts?"
These eleven (11) cases are for Violation of Central Bank Foreign Exchange
Restrictions as consolidated in CB Circular No. 960 in relation to the penal provision
He further argued that no hearing was necessary since the prosecution had nothing to
of Sec. 34 of R.A. 265, as amended.
explain because, as he theorized, "What explanation could have been given? That the
President was talking 'through his hat' (to use a colloquialism) and should not be believed?
That I should wait for the publication (as now alleged by complainants), of a still then non- The accused Mrs. Imelda R. Marcos pleaded not guilty to all these cases; apparently
existent CB circular? . . . As it turned out, CB Circular No. 3153 (sic) does not affect my the other accused in some of these cases, Roberto S. Benedicto, was not arrested
dismissal order because the said circular's so-called saving clause does not refer to CB and therefore the Court did not acquire jurisdiction over his person; trial was
Circular 960 under which the charges in the dismissed cases were based;" that it was commenced as against Mrs. Marcos.
discretionary on him to take judicial notice of the facts which are of public knowledge,
pursuant to Section 2 of Rule 129; that the contention of complainants that he acted His Excellency, the President of the Philippines, announced on August 10, 1992 that
prematurely and in indecent haste for basing his order of dismissal on a mere newspaper the government has lifted all foreign exchange restrictions and it is also reported
account is contrary to the wordings of the newspaper report wherein the President that Central Bank Governor Jose Cuisia said that the Monetary Board arrived at
announced the lifting of controls as an accomplished fact, not as an intention to be effected such decision (issue of the Philippine Daily Inquirer, August 11, 1992 and issue of
in the future, because of the use of the present perfect tense or past tense "has lifted," not the Daily Globe of the same date). The Court has to give full confidence and credit
that he "intends to lift," foreign exchange controls. to the reported announcement of the Executive Department, specially from the
highest official of that department; the Courts are charged with judicial notice of
matters which are of public knowledge, without introduction of proof, the
 10

announcement published in at least the two newspapers cited above which are Executive Order No. 200). The full text of CB Circular 1353, series of 1992, entitled
reputable and of national circulation. "Further Liberalizing Foreign Exchange Regulation" was published in the August 27,
1992 issue of the Manila Chronicle, the Philippine Star and the Manila Bulletin. Per
Per several cases decided by the Supreme Court (People vs. Alcaras, 56 Phil. 520, certification of the CB Corporate Affairs Office, CB Circular No. 1353 took effect on
People vs. Francisco, 56 Phil. 572, People vs. Pastor, 77 Phil. 1000, People vs. September 2 . . . .
Crisanto Tamayo, 61 Phil. 225), among others, it was held that the repeal of a penal
law without re-enactment extinguishes the right to prosecute or punish the offense Considering that respondent judge admittedly had not seen the official text of CB
committed under the old law and if the law repealing the prior penal law fails to Circular No. 1353, he was in no position to rule judiciously on whether CB Circular
penalize the acts which constituted the offense defined and penalized in the No. 960, under which the accused Mrs. Marcos is charged, was already repealed by
repealed law, the repealed law carries with it the deprivation of the courts of CB Circular No. 1353. . . .
jurisdiction to try, convict and sentence persons charged with violations of the old
law prior to its repeal. Under the aforecited decisions this doctrine applies to A cursory reading of the . . . provision would have readily shown that the repeal of
special laws and not only to the crimes punishable in the Revised Penal Code, such the regulations on non-trade foreign exchange transactions is not absolute, as
as the Import Control Law. The Central Bank Circular No. 960 under which the there is a provision that with respect to violations of former regulations that are
accused Mrs. Marcos is charged is considered as a penal law because violation the subject of pending actions or investigations, they shall be governed by the
thereof is penalized with specific reference to the provision of Section 34 of regulations existing at the time the cause of action (arose). Thus his conclusion that
Republic Act 265, which penalizes violations of Central Bank Circular No. 960, he has lost jurisdiction over the criminal cases is precipitate and hasty. Had he
produces the effect cited in the Supreme Court decisions and since according to the awaited the filing of a motion to dismiss by the accused, and given opportunity for
decisions that repeal deprives the Court of jurisdiction, this Court motu the prosecution to comment/oppose the same, his resolution would have been the
propriodismisses all the eleven (11) cases as a forestated in the caption, for not to result of deliberation, not speculation.
do so opens this Court to charges of trying cases over which it has no more
jurisdiction.
I. The doctrine of judicial notice rests on the wisdom and discretion of the courts. The power
to take judicial notice is to be exercised by courts with caution; care must be taken that the
This order was subsequently assailed in a petition for certiorari filed with the Court of requisite notoriety exists; and every reasonable doubt on the subject should be promptly
Appeals, entitled "People of the Philippines vs. Hon. Manuel T. Muro, Judge, RTC of Manila, resolved in the negative. 10
Br. 54 and Imelda R. Marcos," docketed as CA-G.R. SP No. 29349. When required to file her
comment, private respondent Marcos failed to file any. Likewise, after the appellate court
Generally speaking, matters of judicial notice have three material requisites: (1) the matter
gave due course to the petition, private respondent was ordered, but again failed despite
must be one of common and general knowledge; (2) it must be well and authoritatively
notice, to file an answer to the petition and to show cause why no writ of preliminary
settled and not doubtful or uncertain; and (3) it must be known to be within the limits of the
injunction should issue. Eventually, on April 29, 1993, the Court of Appeals rendered a
jurisdiction of the court. 11 The provincial guide in determining what facts may be assumed to
decision 9 setting aside the order of August 13, 1992, and reinstating Criminal Cases Nos. 92-
be judicially known is that of notoriety. 12 Hence, it can be said that judicial notice is limited
101959 to 92-101969.
to facts evidenced by public records and facts of general notoriety. 13

In finding that respondent judge acted in excess of jurisdiction and with grave abuse of
To say that a court will take judicial notice of a fact is merely another way of saying that the
discretion in issuing the order of dismissal, the appellate court held that:
usual form of evidence will be dispensed with if knowledge of the fact can be otherwise
acquired. 14 This is because the court assumes that the matter is so notorious that it will not
The order was issued motu proprio, i.e., without any motion to dismiss filed by be disputed. 15 But judicial notice is not judicial knowledge. The mere personal knowledge of
counsel for the accused, without giving an opportunity for the prosecution to be the judge is not the judicial knowledge of the court, and he is not authorized to make his
heard, and solely on the basis of newspaper reports announcing that the President individual knowledge of a fact, not generally or professionally known, the basis of his action.
has lifted all foreign exchange restrictions. Judicial cognizance is taken only of those matters which are "commonly" known. 16

The newspaper report is not the publication required by law in order that the Things of "common knowledge," of which courts take judicial notice, may be matters coming
enactment can become effective and binding. Laws take effect after fifteen days to the knowledge of men generally in the course of the ordinary experiences of life, or they
following the completion of their publication in the Official Gazette or in a may be matters which are generally accepted by mankind as true and are capable of ready
newspaper of general circulation unless it is otherwise provided (Section 1, and unquestioned demonstration. 17 Thus, facts which are universally known, and which may
 11

be found in encyclopedias, dictionaries or other publications, are judicially noticed, provided investigations, theregulations existing at the time the cause of action accrued shall govern."
they are of such universal notoriety and so generally understood that they may be regarded The terms of the circular are clear and unambiguous and leave no room for interpretation. In
as forming part of the common knowledge of every person. 18 the case at bar, the accused in the eleven cases had already been arraigned, had pleaded not
guilty to the charges of violations of Circular No. 960, and said cases had already been set for
Respondent judge, in the guise of exercising discretion and on the basis of a mere newspaper trial when Circular No. 1353 took effect. Consequently, the trial court was and is supposed to
account which is sometimes even referred to as hearsay evidence twice removed, took proceed with the hearing of the cases in spite of the existence of Circular No. 1353.
judicial notice of the supposed lifting of foreign exchange controls, a matter which was not
and cannot be considered of common knowledge or of general notoriety. Worse, he took Secondly, had respondent judge only bothered to read a little more carefully the texts of the
cognizance of an administrative regulation which was not yet in force when the order of circulars involved, he would have readily perceived and known that Circular No. 1318 also
dismissal was issued. Jurisprudence dictates that judicial notice cannot be taken of a statute contains a substantially similar saving clause as that found in Circular No. 1353, since Section
before it becomes effective. 19 The reason is simple. A law which is not yet in force and 111 of the former provides:
hence, still inexistent, cannot be of common knowledge capable of ready and unquestionable
demonstration, which is one of the requirements before a court can take judicial notice of a Sec. 111. Repealing clause. - All existing provisions of Circulars 365, 960 and 1028,
fact. including amendments thereto, with the exception of the second paragraph of
Section 68 of Circular 1028, as well as all other existing Central Bank rules and
Evidently, it was impossible for respondent judge, and it was definitely not proper for him, to regulations or parts thereof, which are inconsistent with or contrary to the
have taken cognizance of CB Circular No. 1353, when the same was not yet in force at the provisions of this Circular, are hereby repealed or modified accordingly: Provided,
time the improvident order of dismissal was issued. however, that regulations, violations of which are the subject of pending actions or
investigations, shall be considered repealed insofar as such pending actions or
II. Central Bank Circular No. 1353, which took effect on September 1, 1992, further liberalized investigations are concerned, it being understood that as to such pending actions
the foreign exchange regulations on receipts and disbursements of residents arising from or investigations, the regulations existing at the time the cause of action accrued
non-trade and trade transactions. Section 16 thereof provides for a saving clause, thus: shall govern.

Sec. 16. Final Provisions of CB Circular No. 1318. - All the provisions in Chapter X of It unequivocally appears from the section above quoted that although Circular No. 1318
CB Circular No. 1318 insofar as they are not inconsistent with, or contrary to the repealed Circular No. 960, the former specifically excepted from its purview all cases covered
provisions of this Circular, shall remain in full force and effect: Provided, however, by the old regulations which were then pending at the time of the passage of the new
that any regulation on non-trade foreign exchange transactions which has been regulations. Thus, any reference made to Circular No. 1318 necessarily involves and affects
repealed, amended or modified by this Circular, violations of which are the subject Circular No. 960.
of pending actions or investigations, shall not be considered repealed insofar as
such pending actions or investigations are concerned, it being understood that as III. It has been said that next in importance to the duty of rendering a righteous judgment is
to such pending actions or investigations, the regulations existing at the time the that of doing it in such a manner as will beget no suspicion of the fairness and integrity of the
cause of action accrued shall govern. judge. 20 This means that a judge should not only render a just, correct and impartial decision
but should do so in such a manner as to be free from any suspicion as to its fairness and
Respondent judge contends that the saving clause refers only to the provisions of Circular impartiality and as to his integrity. While a judge should possess proficiency in law in order
No. 1318, whereas the eleven criminal cases he dismissed involve a violation of CB Circular that he can competently construe and enforce the law, it is more important that he should
No. 960. Hence, he insists, Circular No. 960 is deemed repealed by the new circular and since act and behave in such a manner that the parties before him should have confidence in his
the former is not covered by the saving clause in the latter, there is no more basis for the impartiality. Thus, it is not enough that he decides cases without bias and favoritism. Nor is it
charges involved in the criminal cases which therefore warrant a dismissal of the same. The sufficient that he in fact rids himself of prepossessions. His actuations should moreover
contention is patently unmeritorious. inspire that belief. Like Caesar's wife, a judge must not only be pure but beyond suspicion. 21

Firstly, the second part of the saving clause in Circular No. 1353 explicitly provides that Moreover, it has always heretofore been the rule that in disposing of controverted cases,
"any regulation on non-trade foreign transactions which has been repealed, amended or judges should show their full understanding of the case, avoid the suspicion of arbitrary
modified by this Circular, violations of which are the subject of pending actions or conclusion, promote confidence in their intellectual integrity and contribute useful
investigations, shall not be considered repealed insofar as such pending actions or precedents to the growth of the law. 22 A judge should be mindful that his duty is the
investigations are concerned, it being understood that as to such pending actions or application of general law to particular instances, that ours is a government of laws and not
 12

of men, and that he violates his duty as a minister of justice under such a system if he seeks deliberately refrained from requiring the prosecution to comment thereon. In a puerile
to do what he may personally consider substantial justice in a particular case and disregards defense of his action, respondent judge can but rhetorically ask: "What explanation could
the general law as he knows it to be binding on him. Such action may have detrimental have been given? That the President was talking 'through his hat' and should not be
consequences beyond the immediate controversy. He should administer his office with due believed? That I should wait for the publication of a still then non- existent CB Circular?" The
regard to the integrity of the system of the law itself, remembering that he is not a pretended cogency of this ratiocination cannot stand even the minutest legal scrutiny.
depository of arbitrary power, but a judge under the sanction of the law. 23 These are
immutable principles that go into the very essence of the task of dispensing justice and we In order that bias may not be imputed to a judge, he should have the patience and
see no reason why they should not be duly considered in the present case. circumspection to give the opposing party a chance to present his evidence even if he thinks
that the oppositor's proofs might not be adequate to overthrow the case for the other party.
The assertion of respondent judge that there was no need to await publication of Circular A display of petulance and impatience in the conduct of the trial is a norm of conduct which
No. 1353 for the reason that the public announcement made by the President in several is inconsistent with the "cold neutrality of an impartial judge." 29 At the very least,
newspapers of general circulation lifting foreign exchange controls is total, absolute, without respondent judge acted injudiciously and with unjustified haste in the outright dismissal of
qualification, and immediately effective, is beyond comprehension. As a judge of the the eleven cases, and thereby rendered his actuation highly dubious.
Regional Trial Court of Manila, respondent is supposed to be well-versed in the elementary
legal mandates on the publication of laws before they take effect. It is inconceivable that V. It bears stressing that the questioned order of respondent judge could have seriously and
respondent should insist on an altogether different and illogical interpretation of an substantially affected the rights of the prosecution had the accused invoked the defense of
established and well-entrenched rule if only to suit his own personal opinion and, as it were, double jeopardy, considering that the dismissal was ordered after arraignment and without
to defend his indefensible action. It was not for him to indulge or even to give the the consent of said accused. This could have spawned legal complications and inevitable
appearance of catering to the at-times human failing of yielding to first impressions. 24 He delay in the criminal proceedings, were it not for the holding of the Court of Appeals that
having done so, in the face of the foregoing premises, this Court is hard put to believe that he respondent judge acted with grave abuse of discretion amounting to lack of jurisdiction. This
indeed acted in good faith. saved the day for the People since in the absence of jurisdiction, double jeopardy will not set
in. To stress this point, and as acaveat to trial courts against falling into the same judicial
IV. This is not a simple case of a misapplication or erroneous interpretation of the law. The error, we reiterate what we have heretofore declared:
very act of respondent judge in altogether dismissing sua sponte the eleven criminal cases
without even a motion to quash having been filed by the accused, and without at least giving It is settled doctrine that double jeopardy cannot be invoked against this Court's
the prosecution the basic opportunity to be heard on the matter by way of a written setting aside of the trial court's judgment of dismissal or acquittal where the
comment or on oral argument, is not only a blatant denial of elementary due process to the prosecution which represents the sovereign people in criminal cases is denied due
Government but is palpably indicative of bad faith and partiality. process. . . . .

The avowed desire of respondent judge to speedily dispose of the cases as early as possible is Where the prosecution is deprived of a fair opportunity to prosecute and prove its
no license for abuse of judicial power and discretion, 25 nor does such professed objective, case, its right to due process is thereby violated.
even if true, justify a deprivation of the prosecution's right to be heard and a violation of its
right to due process of
The cardinal precept is that where there is a violation of basic constitutional rights,
law. 26
courts are ousted of their jurisdiction. Thus, the violation of the State's right to due
process raises a serious jurisdictional issue . . . which cannot be glossed over or
The lightning speed, to borrow the words of complainants, with which respondent judge disregarded at will. Where the denial of the fundamental right of due process is
resolved to dismiss the cases without the benefit of a hearing and without reasonable notice apparent, a decision rendered in disregard of that right is void for lack of
to the prosecution inevitably opened him to suspicion of having acted out of partiality for the jurisdiction . . . . 30
accused. Regardless of how carefully he may have evaluated changes in the factual situation
and legal standing of the cases, as a result of the newspaper report, the fact remains that he
It is also significant that accused Marcos, despite due notice, never submitted either her
gave the prosecution no chance whatsoever to show or prove that it had strong evidence of
comment on or an answer to the petition for certiorari as required by the Court of Appeals,
the guilt of the accused. To repeat, he thereby effectively deprived the prosecution of its
nor was double jeopardy invoked in her defense. This serves to further underscore the fact
right to due process. 27 More importantly, notwithstanding the fact that respondent was not
that the order of dismissal was clearly unjustified and erroneous. Furthermore, considering
sure of the effects and implications of the President's announcement, as by his own
that the accused is a prominent public figure with a record of influence and power, it is not
admission he was in doubt whether or not he should dismiss the cases, 28 he nonetheless
 13

easy to allay public skepticism and suspicions on how said dismissal order came to be, to the The Complainants state that the lifting of controls was not yet in force when I dismissed the
consequent although undeserved discredit of the entire judiciary. cases but it should be noted that in the report of the two (2) newspapers aforequoted, the
President's announcement of the lifting of controls was stated in the present perfect tense
VI. To hold a judge liable for rendering a manifestly unjust order through inexcusable (Globe) or past tense (Inquirer). In other words, it has already been lifted; the announcement
negligence or ignorance, it must be clearly shown that although he has acted without malice, did not say that the government INTENDS to lift all foreign exchange restrictions but instead
he failed to observe in the performance of his duty that diligence, prudence and care which says that the government "has LIFTED all foreign exchange controls," and in the other
the law is entitled to exact in the rendering of any public service. Negligence and ignorance newspaper cited above, that "The government yesterday lifted the last remaining restrictions
are inexcusable if they imply a manifest injustice which cannot be explained by a reasonable on foreign exchange transactions". The lifting of the last remaining exchange regulations
interpretation, and even though there is a misunderstanding or error of the law applied, it effectively cancelled or repealed Circular No. 960.
nevertheless results logically and reasonably, and in a very clear and indisputable manner, in
the notorious violation of the legal precept. 31 The President, who is the Chief Executive, publicly announced the lifting of all foreign
exchange regulations. The President has within his control directly or indirectly the Central
In the present case, a cursory perusal of the comment filed by respondent judge reveals that Bank of the Philippines, the Secretary of Finance being the Chairman of the Monetary Board
no substantial argument has been advanced in plausible justification of his act. He utterly which decides the policies of the Central Bank.
failed to show any legal, factual, or even equitable justification for the dismissal of the eleven
criminal cases. The explanation given is no explanation at all. The strained and fallacious No official bothered to correct or qualify the President's announcement of August 10,
submissions therein do not speak well of respondent and cannot but further depreciate his published the following day, nor made an announcement that the lifting of the controls do
probity as a judge. On this point, it is best that pertinent unedited excerpts from his not apply to cases already pending, not until August 17 (the fourth day after my Order, and
comment 32 be quoted by way of graphic illustration and emphasis: the third day after report of said order was published) and after the President said on August
17, reported in the INQUIRER's issue of August 18, 1992, that the "new foreign exchange
On the alleged ignorance of the law imputed to me, it is said that I issued the Order rules have nullified government cases against Imelda R. Marcos, telling reporters that the
dismissing the eleven (11) cases against Mrs. Imelda R. Marcos on the basis of charges against the widow of former President Marcos "have become moot and academic"
newspaper reports referred to in paragraph 2 of the letter complaint without because of new ruling(s) which allow free flow of currency in and out of the country" (Note,
awaiting the official publication of the Central Bank Circular. Ordinarily a Central parenthetically, the reference to "new rules" not to "rules still to be drafted"). The INQUIRER
Bank Circular/Resolution must be published in the Official Gazette or in a report continues: "A few hours later, presidential spokeswoman Annabelle Abaya said,
newspaper of general circulation, but the lifting of "all foreign exchange controls" RAMOS (sic) had "corrected himself'." "He had been belatedly advised by the Central Bank
was announced by the President of the Philippines WITHOUT QUALIFICATIONS; as Governor Jose Cuisia and Justice Secretary Franklin Drilon that the Monetary Board
published in the Daily Globe, August 11, 1992" the government has lifted ALL Regulation excluded from its coverage all criminal cases pending in court and such a position
foreign exchange controls," and in the words of the Philippine Daily Inquirer report shall stand legal scrutiny', Mrs. Abaya, said."
of the same date "The government yesterday LIFTED the LAST remaining
restrictions on foreign exchange transactions, . . ." (emphasis in both quotations I will elaborate on two points:
supplied) not only the President made the announcement but also the Central Bank
Governor Jose Cuisia joined in the announcement by saying that "the Monetary 1. If the President was wrong in making the August 10 announcement
Board arrived at the decision after noting how the "partial liberalization" initiated (published in August 11, 1992, newspapers) and in the August 17
early this year worked." announcement, SUPRA, and thus I should have relied on the Presidential
announcements, and there is basis to conclude that the President was at
Therefore, because of the ABSOLUTE lifting of ALL restrictions on foreign exchange the very least ILL-SERVED by his financial and legal advisers, because no
transactions, there was no need to await the publication of the repealing circular of one bothered to advise the President to correct his announcements, not
the Central Bank. The purpose of requiring publication of laws and administrative until August 17, 1992, a few hours after the President had made another
rules affecting the public is to inform the latter as to how they will conduct their announcement as to the charges against Imelda Marcos having been
affairs and how they will conform to the laws or the rules. In this particular case, rendered moot and academic. The President has a lot of work to do, and
with the total lifting of the controls, there is no need to await publication. It would is not, to my knowledge, a financier, economist, banker or lawyer. It
have been different if the circular that in effect repealed Central Bank Circular No. therefore behooved his subalterns to give him timely (not "belated")
960, under which the accused was charged in the cases dismissed by me, had advice, and brief him on matters of immediate and far-reaching concerns
provided for penalties and/or modified the provisions of said Circular No. 960. (such as the lifting of foreign exchange controls, designed, among others
 14

to encourage the entry of foreign investments). Instead of rescuing the Only recently, an RTC judge who had been reinstated in the service was dismissed after he
Chief Executive from embarrassment by assuming responsibility for acquitted all the accused in four criminal cases for illegal possession of firearms, on the
errors in the latter's announcement, these advisers have chosen to toss ground that there was no proof of malice or deliberate intent on the part of the accused to
the blame for the consequence of their failing to me, who only acted on violate the law. The Court found him guilty of gross ignorance of the law, his error of
the basis of announcements of their Chief, which had become of public judgment being almost deliberate and tantamount to knowingly rendering an incorrect and
knowledge. unjust judgment. 37

The Court strongly feels that it has every right to assume and expect that respondent judge is ACCORDINGLY, on the foregoing premises and considerations, the Court finds respondent
possessed with more than ordinary credentials and qualifications to merit his appointment as Judge Manuel T. Muro guilty of gross ignorance of the law. He is hereby DISMISSED from the
a presiding judge in the Regional Trial Court of the National Capital Judicial Region, stationed service, such dismissal to carry with it cancellation of eligibility, forfeiture of leave credits and
in the City of Manila itself. It is, accordingly, disheartening and regrettable to note the nature retirement benefits, and disqualification from reemployment in the government service. 38
of the arguments and the kind of logic that respondent judge would want to impose on this
Court notwithstanding the manifest lack of cogency thereof. This calls to mind similar Respondent is hereby ordered to CEASE and DESIST immediately from rendering any
scenarios and how this Court reacted thereto. judgment or order, or continuing any judicial action or proceeding whatsoever, effective
upon receipt of this decision.
In one case, an RTC Judge was administratively charged for acquitting the accused of a
violation of CB Circular No. 960 despite the fact that the accused was apprehended with SO ORDERED.
US$355,349.00 while boarding a plane for Hongkong, erroneously ruling that the State must
first prove criminal intent to violate the law and benefit from the illegal act, and further
“the doctrine of judicial notice rests on the wisdom and discretion of the courts. The power
ordering the return of US$3,000.00 out of the total amount seized, on the mistaken
interpretation that the CB circular exempts such amount from seizure. Respondent judge to take judicial notice is to be exercised by the courts with caution; care must be taken that
therein was ordered dismissed from the government service for gross incompetence and the requisite notoriety exists; and reasonable doubt on the subject should be resolved in the
ignorance of the law. 33 negative”

Subsequently, the Court dismissed another RTC judge, with forfeiture of retirement benefits,
for gross ignorance of the law and for knowingly rendering an unjust order or judgment
when he granted bail to an accused charged with raping an 11-year old girl, despite the Facts:
contrary recommendation of the investigating judge, and thereafter granted the motion to
dismiss the case allegedly executed by the complainant. 34 The state prosecutors who are members of the DOJ Panel of Prosecution filed a complaint
against respondent Judge Muro on the ground of ignorance of the law, grave misconduct and
Similarly, an RTC judge who was described by this Court as one "who is ignorant of fairly violation of the provisions in the Code of Judicial Conduct. The case at bar involves the
elementary and quite familiar legal principles and administrative regulations, has a marked prosecution of the 11 charges against Imelda Marcos in violation of the Central Bank Foreign
penchant for applying unorthodox, even strange theories and concepts in the adjudication of Exchange Restriction in the Central Bank Circular 960. The respondent judge dismissed all 11
controversies, exhibits indifference to and even disdain for due process and the rule of law, cases solely on the basis of the report published from the 2 newspapers, which the judge
applies the law whimsically, capriciously and oppressively, and displays bias and impartiality,"
believes to be reputable and of national circulation, that the Pres. of the Philippines lifted all
was dismissed from the service with forfeiture of all retirement benefits and with prejudice
to reinstatement in any branch of the government or any of its agencies or foreign exchange restrictions. The respondent’s decision was founded on his belief that the
instrumentalities. 35 reported announcement of the Executive Department in the newspaper in effect repealed
the CB 960 and thereby divested the court of its jurisdiction to further hear the pending case
Still in another administrative case, an RTJ judge was also dismissed by this Court for gross thus motu propio dismissed the case. He further contends that the announcement of the
ignorance of the law after she ordered, in a probate proceeding, the cancellation of the President as published in the newspaper has made such fact a public knowledge that is
certificates of title issued in the name of the complainant, without affording due process to sufficient for the judge to take judicial notice which is discretionary on his part.
the latter and other interested parties. 36
 15

The complainants contend that the respondent judge erred in taking judicial notice on of a law that was not yet in force and ordered the dismissal of the case without giving the
matters he purported to be a public knowledge based merely on the account of the prosecution the right to be heard and of due process. The court ordered for the dismissal of
newspaper publication that the Pres. has lifted the foreign exchange restriction. It was also the judge from service for gross ignorance of the law and grave abuse of discretion for
an act of inexcusable ignorant of the law not to accord due process to the prosecutors who dismissing the case motu proprio and for erring in exercising his discretion to take judicial
were already at the stage of presenting evidence thereby depriving the government the right notice on matters that are hearsay and groundless with a reminder the power to take judicial
to be heard. The judge also exercised grave abuse of discretion by taking judicial notice on notice is to be exercised by the courts with caution at all times.
the published statement of the Pres. In the newspaper which is a matter that has not yet
been officially in force and effect of the law. FACTS:

Issue: Whether or not the respondent judge committed grave abuse of discretion in taking
judicial notice on the statement of the president lifting the foreign exchange restriction The state prosecutors who are members of the DOJ Panel of Prosecution filed a complaint
published in the newspaper as basis for dismissing the case? against respondent Judge Muro on the ground of ignorance of the law, grave misconduct and
violation of the provisions in the Code of Judicial Conduct. The case at bar involves the
Ruling:
prosecution of the 11 charges against Imelda Marcos in violation of the Central Bank Foreign
The Supreme Court held the respondent judge guilty for gross ignorance of the law. It cannot Exchange Restriction in the Central BankCircular 960. The respondent judge dismissed all 11
comprehend his assertion that there is no need to wait for the publication of the circular no.
cases solely on the basis of the report published from the 2 newspapers, which the judge
1353 which is the basis of the President’s announcement in the newspaper, believing that
the public announcement is absolute and without qualification and is immediately effective believes to be reputable and of national circulation, that the Pres. of the Philippines lifted all
and such matter becomes a public knowledge which he can take a judicial notice upon in his foreign exchange restrictions. The respondent’s decision was founded on his belief that the
discretion. It is a mandatory requirement that a new law should be published for 15 days in a reported announcement of the Executive Department in the newspaper in effect repealed
newspaper of general circulation before its effectivity. When the President’s statement was
the CB 960 and thereby divested the court of its jurisdiction to further hear the pending case
published in the newspaper, the respondent admitted of not having seen the official text of
thus motu propio dismissed the case. He further contends that the announcement of the
CB circular 1353 thus it was premature for him to take judicial notice on this matter which is
merely based on his personal knowledge and is not based on the public knowledge that the President as published in the newspaper has made such fact a public knowledge that is
law requires for the court to take judicial notice of. sufficient for the judge to take judicial notice which is discretionary on his part.
The complainants contend that the respondent judge erred in taking judicial notice on
For the court to take judicial notice, three material requisites should be present:
matters he purported to be a public knowledge based merely on the account of the
(1) the matter must be one of common and general knowledge; newspaper publication that the Pres. has lifted the foreign exchange restriction. It was also
an act of inexcusable ignorant of the law not to accord due process to the prosecutors who
(2) it must be well and authoritatively settled and not doubtful or uncertain;
were already at the stage of presenting evidence thereby depriving the government the right
(3) it must be known to be within the limits of the jurisdiction of the court. to be heard. The judge also exercised grave abuse of discretion by taking judicial notice on

The fact that should be assumed as judicially known must be on such notoriety that such fact the published statement of the Pres. In the newspaper which is a matter that has not yet
cannot be disputed. Judicial notice is not judicial knowledge where the personal knowledge been officially in force and effect of the law.
of the judge does not amount to the judicial notice of the court. The common knowledge
contemplated by the law where the court can take judicial notice must come from the
ISSUE: Whether or not the respondent judge committed grave abuse of discretion in taking
knowledge of men generally in the course of ordinary experiences that are accepted as true
and one that involves unquestioned demonstration. The court ruled that the information he judicial notice on the statement of the president lifting the foreign exchange restriction
obtained from the newspaper is one of hearsay evidence. The judge erred in taking cognizant published in the newspaper as basis for dismissing the case?
 16

Facts:
HELD:
Judge Muro dismissed 11 cases against Mrs. Marcos for violation of CB Circular 960 or the CB
The Supreme Court held the respondent judge guilty for gross ignorance of the law. It cannot Foreign Exchange Restrictions. The dismissal was based solely on newspaper reports
comprehend his assertion that there is no need to wait for the publication of the circular no. concerning the announcement of the president of the Philippines of the lifting of all foreign
exchange restrictions as embodied in the circular. Judge said that the announcement had the
1353 which is the basis of the President’s announcement in the newspaper, believing that
effect of repealing CB 960.
the public announcement is absolute and without qualification and is immediately effective
and such matter becomes a public knowledge which he can take a judicial notice upon in his Issue: WON dismissal of the cases were proper.

discretion. It is a mandatory requirement that a new law should be published for 15 days in a
HELD:
newspaper of general circulation before its effectivity. When the President’s statement was
published in the newspaper, the respondent admitted of not having seen the official text of No.

CB circular 1353 thus it was premature for him to take judicial notice on this matter which is Matters of judicial notice have 3 material requisites: 1. matter of common and general
merely based on his personal knowledge and is not based on the public knowledge that the knowledge; 2. it must be authoritatively settled and not doubtful or uncertain; and 3. known
law requires for the court to take judicial notice of. to be w/in the limits of jurisdiction of the court.

The principal guide in determining what facts may be assumed to be judicially known is that
For the court to take judicial notice, three material requisites should be present: of notoriety. Hence, it can be said that judicial notice is limited to facts evidenced by public
(1) the matter must be one of common and general knowledge; records and facts of general notoriety (court assumes that the matter is so notorious that it
will not be disputed).
(2) it must be well and authoritatively settled and not doubtful or uncertain;
(3) it must be known to be within the limits of the jurisdiction of the court. Judicial notice is not equivalent to judicial knowledge. The mere personal knowledge of the
judge is not the judicial knowledge of the court, and he is not authorized to make his
The fact that should be assumed as judicially known must be on such notoriety that such fact individual knowledge of a fact, not generally or professionally known, the basis of his action.

cannot be disputed. Judicial notice is not judicial knowledge where the personal knowledge Things of ―common knowledge,‖ of which courts take judicial notice, may be matters
of the judge does not amount to the judicial notice of the court. The common knowledge coming to the knowledge of men generally in the course of the ordinary experiences of life,
contemplated by the law where the court can take judicial notice must come from the or they may be matters which are generally accepted by mankind as true and are capable of
ready and unquestioned demonstration. Thus, facts which are universally known, and which
knowledge of men generally in the course of ordinary experiences that are accepted as true
may be found in encyclopedias, dictionaries or other publications, are judicially noticed,
and one that involves unquestioned demonstration. The court ruled that the information he provided they are of such universal notoriety and so generally understood that they may be
obtained from the newspaper is one of hearsay evidence. The judge erred in taking cognizant regarded as forming part of the common knowledge of every person.
of a law that was not yet in force and ordered the dismissal of the case without giving the
Judicial notice cannot be taken of a statute before it becomes effective. A law not yet in force
prosecution the right to be heard and of due process. The court ordered for the dismissal of
and hence still inexistent, cannot be common knowledge capable of unquestionable
the judge from service for gross ignorance of the law and grave abuse of discretion for demonstration.
dismissing the case motu proprio and for erring in exercising his discretion to take judicial
notice on matters that are hearsay and groundless with a reminder the power to take judicial
notice is to be exercised by the courts with caution at all times.
 17

FIRST DIVISION Plaintiff proceeded to mark the following exhibits: Exh. "A", letter dated October 4,
1921 addressed in Makato, Capiz, Philippines; Exh. "A-1", paragraph 2 of the letter
G.R. No. 85423 May 6, 1991 indicating that the amount of P600.00—the first P300.00 and then another P300.00
as interest since October 4, 1921; Exh. "A-2", is paragraph 3 of the letter; Exh. "B",
a Spanish document; Exh. "C", deed of conveyance filed by Tomasa Timtiman and
JOSE TABUENA, petitioner,
Alfredo Tabernilla in 1923; and Exh. "C-1", paragraph 4 of Exh. "C".
vs.
COURT OF APPEALS and EMILIANO TABERNILLA, JR., respondents.
In sustaining the trial court, the respondent court held that, contrary to the allegations of the
appellant, the said exhibits were in fact formally submitted in evidence as disclosed by the
CRUZ, J.:
transcript of stenographic notes, which it quoted at length. 2 The challenged decision also
upheld the use by the trial court of testimony given in an earlier case, to bolster its findings in
The petitioner faults the decision of the trial court, as affirmed by the respondent court, for the second case.
lack of basis. It is argued that the lower courts should not have taken into account evidence
not submitted by the private respondent in accordance with the Rules of Court.
We have examined the record and find that the exhibits submitted were not the above-
described documents but Exhibits "X" and "T" and their sub-markings, which were the last
The subject of the dispute is a parcel of residential land consisting of about 440 square will and testament of Alfredo Tabernilla and the order of probate. It is not at all denied that
meters and situated in Poblacion, Makato, Aklan. In 1973, an action for recovery of the list of exhibits does not include Exhibits "A", "B" and "C". In fact, the trial court
ownership thereof was filed in the Regional Trial Court of Aklan by the estate of Alfredo categorically declared that "Exhibits "A-1, "A-2", "B", "C" and "C-l," were not among those
Tabernilla against Jose Tabuena, the herein petitioner. After trial, judgment was rendered in documents or exhibits formally offered for admission by plaintiff-administratrix." This is a
favor of the plaintiff and the defendant was required to vacate the disputed lot. 1 clear contradiction of the finding of the appellate court, which seems to have confused
Exhibits "A," "B" and "C" with Exhibits "X" and "Y", the evidence mentioned in the quoted
As the trial court found, the lot was sold by Juan Peralta, Jr. sometime in 1926 to Alfredo transcript.
Tabernilla while the two were in the United States. Tabernilla returned to the Philippines in
1934, and Damasa Timtiman, acting upon her son Juan's instruction, conveyed the subject Rule 132 of the Rules of Court provides in Section 35 thereof as follows:
land to Tabernilla. At the same time, she requested that she be allowed to stay thereon as
she had been living there all her life. Tabernilla agreed provided she paid the realty taxes on
Sec. 35. Offer of evidence.—The court shall consider no evidence which has not
the property, which she promised to do, and did. She remained on the said land until her
been formally offered. The purpose for which the evidence is offered must be
death, following which the petitioner, her son and half-brother of Juan Peralta, Jr., took
specified.
possession thereof. The complaint was filed when demand was made upon Tabuena to
surrender the property and he refused, claiming it as his own.
The mere fact that a particular document is marked as an exhibit does not mean it has
thereby already been offered as part of the evidence of a party. It is true that Exhibits "A,"
The trial court rejected his defense that he was the absolute owner of the lot, which he
"B" and "C" were marked at the pre-trial of the case below, but this was only for the purpose
inherited from his parents, who acquired it even before World War II and had been living
of identifying them at that time. They were not by such marking formally offered as exhibits.
thereon since then and until they died. Also disbelieved was his contention that the subject
As we said in Interpacific Transit, Inc. vs. Aviles, 3 "At the trial on the merits, the party may
of the sale between Peralta and Tabernilla was a different piece of land planted to coconut
decide to formally offer (the exhibits) if it believes they will advance its cause, and then again
trees and bounded on three sides by the Makato River.
it may decide not to do so at all. In the latter event, such documents cannot be considered
evidence, nor can they be given any evidentiary value."
Tabuena appealed to the respondent court, complaining that, in arriving at its factual
findings, the trial court motu proprio took cognizance of Exhibits "A", "B" and "C", which had
Chief Justice Moran explained the rationale of the rule thus:
been marked by the plaintiff but never formally submitted in evidence. The trial court also
erred when, to resolve the ownership of the subject lot, it considered the proceedings in
another case involving the same parties but a different parcel of land. . . . The offer is necessary because it is the duty of a judge to rest his findings of
facts and his judgment only and strictly upon the evidence offered by the patties at
the trial. 4
The said exhibits are referred to in the pre-trial order as follows:
 18

We did say in People vs. Napat-a 5 that even if there be no formal offer of an exhibit, it may pending." These conditions have not been established here. On the contrary, the petitioner
still be admitted against the adverse party if, first, it has been duly identified by testimony was completely unaware that his testimony in Civil Case No. 1327 was being considered by
duly recorded and, second, it has itself been incorporated in the records of the case. But we the trial court in the case then pending before it. As the petitioner puts it, the matter was
do not find that these requirements have been satisfied in the case before us. The trial court never taken up at the trial and was "unfairly sprung" upon him, leaving him no opportunity to
said the said exhibits could be validly considered because, even if they had not been formally counteract.
offered, one of the plaintiffs witnesses, Cunegunda Hernandez, testified on them at the trial
and was even cross-examined by the defendant's counsel. We do not agree. Although she did The respondent court said that even assuming that the trial court improperly took judicial
testify, all she did was identify the documents. Nowhere in her testimony can we find a notice of the other case, striking off all reference thereto would not be fatal to the plaintiff's
recital of the contents of the exhibits. cause because "the said testimony was merely corroborative of other evidences submitted
by the plaintiff." What "other evidences"? The trouble with this justification is that the
Thus, her interrogation on Exhibit "A" ran: exhibits it intends to corroborate, to wit, Exhibits "A", "B" and "C", have themselves not been
formally submitted.
LEGASPI: That is this Exh. "A" about ?
Considering the resultant paucity of the evidence for the private respondent, we feel that the
A The translation of the letter. complaint should have been dismissed by the trial court for failure of the plaintiff to
substantiate its allegations. It has failed to prove that the subject lot was the same parcel of
land sold by Juan Peralta, Jr. to Alfredo Tabernilla and not another property, as the petitioner
Q What is the content of this Exh. "A", the letter of the sister of Juan Peralta to
contends. Even assuming it was the same lot, there is no explanation for the sale thereof by
Alfredo Tabernilla?
Juan Peralta, Jr., who was only the son of Damasa Timtiman. According to the trial court,
"there is no question that before 1934 the land in question belonged to Damasa Timtiman."
Court: The best evidence is the document. Proceed. 6 Juan Peralta, Jr. could not have validly conveyed title to property that did not belong to him
unless he had appropriate authorization from the owner. No such authorization has been
She also did not explain the contents of the other two exhibits. presented.

The respondent court also held that the trial court committed no reversible error in taking It is true that tax declarations are not conclusive evidence of ownership, as we have held in
judicial notice of Tabuena's testimony in a case it had previously heard which was closely many cases.1âwphi1However, that rule is also not absolute and yields to the accepted and
connected with the case before it. It conceded that as a general rule "courts are not well-known exception. In the case at bar, it is not even disputed that the petitioner and his
authorized to take judicial notice, in the adjudication of cases pending before them, of the predecessors-in-interest have possessed the disputed property since even before World War
contents of the records of other cases, even when such cases have been tried or are pending II. In light of this uncontroverted fact, the tax declarations in their name become weighty and
in the same court, and notwithstanding the fact that both cases may have been heard or are compelling evidence of the petitioner's ownership. As this Court has held:
actually pending b before the same judge. 7 Nevertheless, it applied the exception that:
While it is true that by themselves tax receipts and declarations of ownership for
. . . in the absence of objection, and as a matter of convenience to all parties, a taxation purposes are not incontrovertible evidence of ownership they become
court may properly treat all or any part of the original record of a case filed in its strong evidence of ownership acquired by prescription when accompanied by proof
archives as read into the record of a case pending before it, when, with the of actual possession of the property. 9
knowledge of the opposing party, reference is made to it for that purpose, by name
and number or in some other manner by which it is sufficiently designated; or It is only where payment of taxes is accompanied by actual possession of the land
when the original record of the former case or any part of it, is actually withdrawn covered by the tax declaration that such circumstance may be material in
from the archives by the court's direction, at the request or with the consent of the supporting a claim of ownership. 10
parties, and admitted as a part of the record of the case then pending. 8
The tax receipts accompanied by actual and continuous possession of the subject
It is clear, though, that this exception is applicable only when, "in the absence of objection," parcels of land by the respondents and their parents before them for more than 30
"with the knowledge of the opposing party," or "at the request or with the consent of the years qualify them to register title to the said subject parcels of land. 11
parties," the case is clearly referred to or "the original or part of the records of the case are
actually withdrawn from the archives" and "admitted as part of the record of the case then
 19

The Court can only wonder why, if Alfredo Tabernilla did purchase the property and
magnanimously allowed Damasa Timtiman to remain there, he did not at least require her to
pay the realty taxes in his name, not hers. The explanation given by the trial court is that he
was not much concerned with the property, being a bachelor and fond only of the three dogs
he had bought from America. That is specious reasoning. At best, it is pure conjecture. If he
were really that unconcerned, it is curious that he should have acquired the property in the
first place, even as dacion en pago. He would have demanded another form of payment if he
did not have the intention at all of living on the land. On the other hand, if he were really
interested in the property, we do not see why he did not have it declared in his name when
the realty taxes thereon were paid by Damasa Timtiman or why he did not object when the
payments were made in her own name.

In comparison, all the acts of Damasa Timtiman and Jose Tabuena indicate that they were
the owners of the disputed property. Damasa Timtiman and her forebears had been in
possession thereof for more than fifty years and, indeed, she herself stayed there until she
died. 12 She paid the realty taxes thereon in her own name. 13 Jose Tabuena built a house of
strong materials on the lot. 14 He even mortgaged the land to the Development Bank of the
Philippines and to two private persons who acknowledged him as the owner. 15 These acts
denote ownership and are not consistent with the private respondent's claim that the
petitioner was only an overseer with mere possessory rights tolerated by Tabernilla.

It is the policy of this Court to accord proper deference to the factual findings of the courts
below and even to regard them as conclusive where there is no showing that they have been
reached arbitrarily. The exception is where such findings do not conform to the evidence on
record and appear indeed to have no valid basis to sustain their correctness. As in this case.

The conclusions of the trial court were based mainly on Exhibits "A", "B" and "C", which had
not been formally offered as evidence and therefore should have been totally disregarded,
conformably to the Rules of Court. The trial court also erred when it relied on the evidence
submitted in Civil Case No. 1327 and took judicial notice thereof without the consent or
knowledge of the petitioner, in violation of existing doctrine. Thus vitiated, the factual
findings here challenged are as an edifice built upon shifting sands and should not have been
sustained by the respondent court.

Our own finding is that the private respondent, as plaintiff in the lower court, failed to prove
his claim of ownership over the disputed property with evidence properly cognizable under
our adjudicative laws. By contrast, there is substantial evidence supporting the petitioner's
contrary contentions that should have persuaded the trial judge to rule in s favor and dismiss
the complaint.

WHEREFORE, the petition is GRANTED. The appealed decision is REVERSED and SET ASIDE,
with costs against the private respondent. It is so ordered.
 20

FACTS: Section 35, Rule 132 of the Rules of Court provides, the court shall consider no evidence
which has not been formally offered. The purpose for which the evidence is offered must be
In 1926, Alfredo Tabernilla bought a parcel of land in Aklan from Juan Peralta Jr. while they specified. The mere fact that a particular document is marked as an exhibit does not mean it
were both in the United States. In 1934, Tabernilla returned to the Philippines and Peralta’s has thereby already been offered as part of the evidence of a party. It is true that Exhibits
mother, Damasa Timtiman conveyed the land to Tabernilla based on her son’s instructions. "A," "B" and "C" were marked at the pre-trial of the case below, but this was only for the
purpose of identifying them at that time. They were not by such marking formally offered as
Damasa requested that she be allowed to stay thereon as she had been living there all her
exhibits.
life. Tabernilla agreed provided she paid the realty taxes on the property, which she
promised to do, and did under her name. She remained on the said land until her death,
(2) Yes. The lower court failed to consider conditions of the exception to the general rule that
following which Jose Tabuena, Timtiman’s son and half-brother of Peralta, Jr., took
courts are not authorized to take judicial notice, in the adjudication of cases pending before
possession thereof. Tabernilla demanded that they leave and surrender the property but
them, of the contents of the records of other cases, even when such cases have been tried or
they refused, claiming the lot as their own.
are pending in the same court, and notwithstanding the fact that both cases may have been
heard or are actually pending before the same judge. The exception to this rule is that in the
In 1973, the estate of Alfredo Tabernilla filed an action for recovery of ownership against
absence of objection, and as a matter of convenience to all parties, a court may properly
Jose Tabuena in the RTC of Aklan. The RTC rejected Tabuena’s defense that he was the
treat all or any part of the original record of a case filed in its archives as read into the record
absolute owner of the lot, which he inherited from his parents. The RTC also disbelieved his
of a case pending before it, when:
contention that the subject of the sale between Peralta and Tabernilla was a different piece
of land. Tabuena elevated the case to the CA complaining that the trial court, in arriving at
a. with the knowledge of the opposing party, reference is made to it for that purpose,
its factual findings, motu proprio took cognizance of Exhibits "A", "B" and "C", which had by name and number or in some other manner by which it is sufficiently
been marked by Tabernilla’s side but never formally submitted in evidence. The CA sustained designated; or
the decision of the RTC and held that contrary to the allegations of Tabuena, the said exhibits b. when the original record of the former case or any part of it, is actually withdrawn
were in fact formally submitted in evidence as disclosed by the transcript of stenographic from the archives by the court's direction, at the request or with the consent of the
notes, which it quoted at length. Hence, this petition. parties, and admitted as a part of the record of the case then pending. 8

ISSUES: In this case, these conditions have not been properly complied with. Tabuena was, in fact,
completely unaware that his testimony in Civil Case No. 1327 was being considered by the
(1) Were Exhibits "A", "B" and "C" formally offered as evidence? trial court in the case then pending before it. As he puts it, the matter was never taken up at
the trial and was "unfairly sprung" upon him, leaving him no opportunity to counteract.
(2) Was the trial court amiss in taking judicial notice of evidence submitted in another case
(Civil Case No. 1327) without the consent or knowledge of Tabuena? WHEREFORE, the petition is GRANTED. The appealed decision is REVERSED and SET ASIDE,
with costs against the private respondent. It is so ordered.
RULING:

(1) No. The Court examined the records and found that the exhibits submitted were not the
documents referred to but Exhibits "X" and "T" and their sub-markings, which were the last
will and testament of Alfredo Tabernilla and the order of probate. It wass not at all denied
that the list of exhibits does not include Exhibits "A", "B" and "C". In fact, the trial court
categorically declared that "Exhibits "A-1, "A-2", "B", "C" and "C-l," were not among those
documents or exhibits formally offered for admission by plaintiff-administratrix." This is a
clear contradiction of the finding of the appellate court, which seems to have confused
Exhibits "A," "B" and "C" with Exhibits "X" and "Y", the evidence mentioned in the quoted
transcript.
 21

G.R. No. 96721 March 19, 1993 1. Ordering the defendants, Occidental Land Transportation Company and Edgardo Enerio, to
pay to the plaintiffs, Trencio Almedilla and Alberto Pingkian, the following:
OCCIDENTAL LAND TRANSPORTATION COMPANY, INC. and EDGARDO ENERIO, petitioners,
vs. For Plaintiff Almedilla:
HONORABLE COURT OF APPEALS, HEIRS OF TRENCIO ALMEDILLA, ALBERTO PINGKI-AN AND
HEIRS OF PACIFICO CARBAJOSA, SR., respondents. (a) P 9,473.80 for the repair of the damaged Ford Fiera;

NOCON, J.: (b) P400.00 for hospitalization;

The legal question raised in this petition for review on certiorari of the decision of the Court (c) P100.00 daily for the income of the Ford Fiera starting from November 25, 1975 to March
of Appeals, 1 affirmingin toto the decision of the Regional Trial Court of Zamboanga del Norte 10, 1986;
(Branch VI Dipolog City), presided by the Hon. Daniel B. Bernaldez 2 is whether or not the trial
court can take judicial notice of the decision of another case involving a similar issue. The
(d) P5,000.00 for moral damages.
appellate and lower courts ruled in the affirmative.

For Plaintiff Pingkian:

The case began with the collision of a Ford Fiera and a Carina Express No. C-24 passenger bus
in Bunawan, Calamba, Misamis Occidental on November 25, 1975 at about six o'clock a.m. As
a result of this, the Ford Fiera was thrown into the canal on the right side of the road. Its (e) P5,000.00 for moral damages;
driver, Pacifico Carbajosa, Sr. was pinned under the steering wheel, while the engine was
burning, causing him to be seriously burned and later die of such injuries. Trencio Almedilla, (f) P100.00 for loss of income;
the owner of the Fiera which was registered under Sevilla Line, and Alberto Pingkian were
likewise in the Fiera and suffered various injuries as a result of the incident. Neither the (g) P100.00 for incidental expenses; and
driver nor the passengers of the Carina Express No. C-24 stopped to assist the victims, but
rather the bus proceeded towards Sapang Dalaga. 3
(h) P1,000.00 for attorney's fees.
The owner of the Carina passenger bus, Occidental Land Transportation Company filed a case
for damages against Sevilla Line and/or William Sevilla, the registered owner of the Ford 2. Ordering the defendants aforenamed to pay to the intervenors Carbajosas the following;
Fiera, which case was docketed as Civil Case No. 3156 before the Court of First Instance,
Branch III, Oroquieta City. Trencio Almedilla and Alberto Pingkian also filed a civil suit for (a) P6,000.00 for hospitalization;
damages against Occidental Land Transportation Company, Inc. and the driver of the Carina
bus, Edgardo Enerio. Later the heirs of Pacifico Carbajosa filed a complaint-in-intervention. (b) P3,000.00 for embalming, funeral services and last prayers;
This case was docketed as Civil Case No. 2728 before the Regional Trial Court of Zamboanga
del Norte, Branch VI, Dipolog City.
(c) P5,000.00 for moral damages;

On July 30, 1977, Judge Rodolfo A. Ortiz of the Oroquieta court rendered a decision in Civil
(d) P5,000.00 for attorney's fees; and
Case No. 3156 finding the driver of the Carina passenger bus and not the driver of the Ford
Fiera, as negligent. 4
(e) P500.00 for actual and incidental expenses.
On March 11, 1986, more than ten years after the inception of the case, Judge Daniel B.
Bernaldez rendered the decision in Civil Case No. 2728 against Occidental Land 3. Dismissing the complaint-in-intervention insofar as it concerns plaintiffs Trencio Almedilla
Transportation Company, Inc. and Edgardo Enerio. 5 The dispositive portion reads: and Alberto Pingkian.

ACCORDINGLY, and in view of all the foregoing, the Court hereby renders judgment as 4. Denying the reliefs prayed for in the answer to the complaint-in-intervention of plaintiffs
follows: Trencio Almedilla and Alberto Pingkian;
 22

5. Denying the reliefs prayed for in the answer to the complaint-in-intervention of the The accident was reported to the police authorities of Calamba, as a result of which
aforenamed defendants; Acting Station Commander Arceno of Calamba Police Station, Police District No. II,
made a Police Report dated November 25, 1975 as follows:
6. Dismissing the counterclaim of the defendants aforenamed for lack of merit; and
POLICE REPORT
7. Ordering the defendants aforenamed to pay the costs.
At about 0645 Hrs More or less 25, Nov. Sevilla Line bearing plate No. 8-B940 which was
SO ORDERED. 6 driven by Pacifico Carbajosa y Gemillan, 40 years old, married and a resident of 398 Martines
St., Dipolog City, said driver was burned and injured seriously when on the way at Bunawan
this Municipality, due to a bumping incident.
The facts of the case were "adopted by reference" from the decision of the then Court of
First Instance, Branch III of Oroquieta City in Civil Case No. 3156. 7
Bus Line marked Carina bearing Plate No. 939 driven by Edgardo Enerio y Paglinawan of
Sapang Dalaga, Misamis Occidental, Hit and run and surrendered to Sapang Dalaga office of
It reads as follows:
the Station Commander.

That at about 4:50 o'clock in the morning of November 25, 1975, Trencio Almedilla,
The driver of Sevilla Line with his two companions were rushed to the Calamba Community
who was the real owner of the Ford Fiera, but attached to the Sevilla Lines of
Hospital for treatment. The scene of the incident was investigated by F/Sgt. Pagalaran, Sr. 8
defendant William Sevilla, left for Ozamis City, on board his Ford Fiera, to buy
textiles, together with Alberto Pingkian who wanted to visit his aunt at Ozamis City.
Reaching Dipolog City, Trencio Almedilla came upon Pacifico Carbajosa, who wants Petitioners Occidental Land Transportation Company Inc. and Edgardo Enerio appealed from
(sic) to load fish in the Ford Fiera for Ozamis City. As it was an opportune occasion, the above-quoted decision to the Court of Appeals. 9 They assigned the following errors:
Trencio agreed to load the fish of Pacifico for a freight of P130.00. So they loaded
the fish of Pacifico at Miputak, then got gasoline at a Caltex Station and proceeded I
towards Ozamis City. Trencio, was driving his Ford Fiera, was running slowly as
Pacifico alias "Balodoy" told him not to go fast so that his fish will not get THAT THE TRIAL COURT ERRED IN DECIDING THE CASE BASED ON A
destroyed. After passing Sapang Dalaga, at Misamis Occidental, Trencio developed DECISION RENDERED IN ANOTHER CASE.
stomach ache. At this, "Balodoy" requested that Trencio allow him to drive the
Ford Fiera as he was an experienced driver. Trencio agreed. And so, with "Balodoy"
II
on the wheels of the Ford Fiera, they proceeded slowly for fear that the fish will get
damaged. Reaching Bunawan, at Calamba, and while negotiating a curb at the
descending portion of the asphalted national highway, which was wet, as it was THAT THE TRIAL COURT ERRED IN NOT HOLDING THAT' THE FORD FIERA
raining, a Carina passenger bus was running fast in an ascent, zigzagging towards WAS EXCLUSIVELY RESPONSIBLE FOR THE ACCIDENT.
them. Because of this, the Ford Fiera went towards the extreme right of the road
with its right front and rear tires already running at (sic) the ground shoulder, but III
even as the Ford Fiera tried to avoid the zigzagging Carina Express No. C-24, the
said Carina bus jerked towards the left, hitting, as a result, the Ford Fiera at the left THAT THE TRIAL COURT ERRED IN NOT HOLDING THAT THE FORD FIERA
fender and hood, throwing it to the canal at the right side, with engine burning. DID NOT BELONG TO THE PLAINTIFF TRENCIO ALMEDILLA. 10
The Carina passenger bus continued to swerve towards the left until it turn about,
facing towards the direction of Ozamis City. Balodoy was pinned by the steering
wheel to his driver's seat and was seriously injured, Pingkian and Trencio were also The Court of Appeals affirmed the decision in toto and disposed of the errors
injured, but they were well enough to try to help to extricate Balodoy, not until assigned in the following manner:
Genito Compania got a piece of wood from his house nearby, which he used as a
lever to pry out Balodoy. The driver of the Carina passenger bus, which had three Anent the first assigned error, such step of the trial court in taking judicial notice of Civil Case
(3) passengers, at that time, did not help Balodoy. Instead it proceeded towards No. 315(6) is sanctioned under Rule 129, Sec. 1 of the Revised Rules of Court. Thus, as aptly
Sapang Dalaga. put by Chief Justice Moran "Courts have also taken judicial notice of previous cases to
determine whether or not the case pending is a moot one or whether or not a previous ruling
 23

is applicable in the case under consideration (5 Moran, Comments on the Rules of Court, No error was committed by the respondent court when it upheld the findings of the trial
1970, ed., p. 50). court in Civil Case No. 2728.

Hence, considering the previous decision in Civil Case No. 315(6) involving the same vehicular The reasons advanced by the respondent court in taking judicial notice of Civil Case No. 3156
accident had already put to rest the issue as to the negligence of defendants, the court are valid and not contrary to law. As a general rule, "courts are not authorized to take judicial
properly took cognizance of said decision as a matter of convenience, as these facts are notice, in the adjudication of cases pending before them, of the contents of the records of
capable of unquestionable demonstration (Baguio vs. De Jalagat 42 SCRA 337). other cases, even when such cases have been tried or are pending in the same court, and
notwithstanding the fact that both cases may have been heard or are actually pending before
As to the liability of the defendants in the vehicular mishap, We concur with the finding of the same judge." The general rule admits of exceptions as enumerated in Tabuena v. Court of
the trial court in Civil Case No. 315(6) which held inter alia: Appeals, 13 the Court, citing U.S. v. Claveria,14 which We quote:

Moreover, it does not seem possible, as claimed by plaintiff's own witness, Crisanto . . . in the absence of objection, and as a matter of convenience to all parties, a
Andus, that while negotiating the curb, and while starting to descend, the Ford court may properly treat all or any part of the original record of a case filed in its
Fiera slid towards the Carina Express No. C-24, hitting its left rear as a archives as read into the record of a case pending before it, when, with the
consequence. For the Ford Fiera was admittedly loaded with fish and that knowledge of the opposing party, reference is made to it for that purpose, by name
consequently, because of the weight of its cargo, in relation to its capacity, it will and number or in some other manner by which it is sufficiently designated; or
have more traction even in a slippery wet asphalted road; and, as such, the when the original record of the former case or any part of it, is actually withdrawn
probability of its sliding towards the extreme left side of the road is improbable, if from the archives by the court's direction, at the request or with the consent of the
not remote. Not so in the case of Carina Express No. C-24, which had only three (3) parties, and admitted as a part of the record of the case then pending.
passengers at that time, or even fifteen (15) passengers, as claimed by the plaintiff.
For with this load, the said bus was undoubtedly travelling without much traction, It is clear, though, that this exception is applicable only when, 'in the absence of
since its passenger load was not enough to give it stability while running, objection,' 'with the knowledge of the opposing party,' or 'at the request or with the consent
considering its size and body weight; and that, therefore, it must have been, as of the parties,' the case is clearly referred to or 'the original or part of the records of the case
described by defendant's witnesses, that Carina Express No. C-24, was running fast are actually withdrawn from the archives' and 'admitted as part of the record of the case then
in a zigzagging manner along the slippery wet asphalted national highway causing pending.' (Emphasis supplied).
its left rear to jerk towards the left, with the driver losing control, sideswiping the
Ford Fiera in the process, and then continuing its swerving towards the left until it The Court in Tabuena ruled that the conditions necessary for the exception to be applicable
turned about facing Ozamis City. were not established, such as that ". . ., (t)he petitioner was completely unaware that his
testimony in Civil Case No. 1327 was being considered by the trial court in the case then
Correlatively, it is well-settled that the conclusions of facts of the trial court are pending before it. As the petitioner puts it, the matter was never taken up at the trial and
entitled to great respect and shall not be generally disturbed on appeal, because it was 'unfairly sprung' upon him, leaving him no opportunity to counteract." 15
is in a better position that the appellate tribunal to examine the evidence directly
and to observe the demeanor of the witness while testifying (Hermo vs. Court of The same is not true in the instant case. Civil Case No. 3156, which the lower court in Civil
Appeals, 155 SCRA 24). 11 Case No. 2728 took judicial notice of, decided the issue of negligence between the driver of
the two vehicles involved in the subject collision. It was therefore a matter of convenience,
Hence this petition. to consider the decision rendered in that case.

The errors assigned by the petitioners are almost identical to those raised before the And unlike the factual situation in Tabuena v. CA, the decision in Civil Case No. 3156 formed
appellate court. They claim that it was error for the respondent court to "uphold the decision part of the records of the instant case (Civil Case No. 2728) with the knowledge of the parties
of the trial court based on the judgment rendered in another case," and "uphold the grant of and in the absence of their objection. This fact was pointed out by the lower court, to wit:
damages for the Ford Fiera when the same did not belong to Trencio Almedilla." 12
The . . . findings of the Oroquieta Court became as conclusive upon the company
The petition is devoid of merit. and its driver by their acquiescence and silence. . . . (Decision of lower court. p. 12;
records p. 239)
 24

Returning to Exhibit "O," supra (Decision, Civil Case No. 3156, CFI, Branch
III, Oroquieta City), the Court hastens to add: Said exhibit has not been
objected to nor commented upon by the defendants Company and
Enerio, through their counsel, . . . . 16

This being the case, petitioners were aware that Exhibit "O" (Decision in Civil Case No. 3156)
had formed part of the records of the case and would thereby be considered by the trial
court in its decision.

Furthermore, upon perusal of Exhibit "O," and the decision of the lower court in the instant
case, there is no showing of any irregularity but rather a logical discussion of the case and the
evidence presented before the court. The lower court did not merely "adopt by reference"
the findings of fact of the Oroquieta court, but used it in its discourse to obtain the
conclusions pronounced in its decision.

Petitioner alleges that the Ford Fiera did not belong to Trencio Almedilla, but to its registered
owner — Sevilla Lines, and therefore the grant of damages for its repair was improperly
awarded to private respondent Almedilla. This factual matter has already been decided upon
in the trial court.

The fact that the Fiera was owned by Almedilla though registered with Sevilla Line, will not
alter the conclusion arrived at by the lower court. The party who stands to benefit or suffer
from the decision is admittedly private respondent Almedilla and not Sevilla Lines. William
Sevilla admitted that the real owner of the vehicle was Trencio Almedilla, in the case for
damages by Occidental Land Transportation against Sevilla Lines and/or William
Sevilla.17 Having thus been settled in the lower court, petitioner is now no longer in any
position to question the ownership of the Fiera or the award of damages to private
respondent Almedilla.

WHEREFORE, finding no error in the decision of the Court of Appeals dated September 28,
1990 (CA-G.R. CV No. 10176) affirming the decision of the trial court dated March 11, 1986,
the petition for review is denied for lack of merit with costs against the petitioners.

SO ORDERED.
 25

SECOND DIVISION by mortgage[6] over lands situated in Dubinan and Mabini, Santiago, Isabela, covered by TCT

Nos. T-202288, T-180503, T-260279, and T-272664.

METROPOLITAN BANK & TRUST COMPANY, G.R. No. 187917
Petitioner,
- versus - Promulgated: Respondents encountered difficulties in paying their loans. They requested for a longer

SPOUSES EDMUNDO MIRANDA and JULIE MIRANDA, January 19, 2011 period to settle their account and further requested for the restructuring of their loans,
Respondents.
which requests Metrobank granted. Respondents then signed Promissory Note (PN) No.
x------------------------------------------------------------------------------------x 599773[7] for P6,400,000.00, and PN No. 599772[8] for P950,000.00, both payable on February

24, 2002, with interest at 17.250% per annum. They also amended the deeds of real estate
DECISION
mortgage they executed in favor of Metrobank to increase the amount of loans secured by
NACHURA, J.: mortgage to P6,350,000.00. The amendment was inscribed on TCT Nos. T-202288,[9] T-

260279,[10] and T-180503.[11]

On appeal is the June 30, 2008 Decision[1] of the Court of Appeals (CA) in CA-G.R. CV No.

87775, affirming the June 16, 2006 Decision[2] of the Regional Trial Court (RTC) of Santiago On August 25, 2000, Metrobank sent respondents a demand letter[12] to settle their overdue

City, Branch 35, as well as its subsequent Resolution dated May 7, 2009,[3] denying account of P8,512,380.15, inclusive of interest and penalties; otherwise, the bank would

petitioners motion for reconsideration. initiate the necessary legal proceedings x x x, without further notice. Respondents, however,

failed to settle their account. Consequently, Metrobank caused the extrajudicial foreclosure

Respondents, spouses Edmundo Miranda and Julie Miranda, applied for and obtained a and auction sale of the mortgaged properties on November 16, 2000. The Clerk of Court

credit accommodation from petitioner Metropolitan Bank & Trust Company (Metrobank).On and Ex-Officio Sheriff of Santiago City sold the mortgaged properties at public auction for the

August 27, 1996, respondents obtained a P4,000,000.00 loan from Metrobank and executed sum of P9,284,452.00 to Metrobank, as the highest bidder. A Certificate of Sale[13] was issued

a real estate mortgage[4] over a parcel of land in Poblacion, Santiago, Isabela, covered by in favor of Metrobank on November 27, 2000, which was registered with the Registry of

Transfer Certificate of Title (TCT) No. 202288. Upon respondents request, Metrobank Deeds on November 29, 2000.

increased the loan from P4,000,000.00 to P5,000,000.00. The real estate mortgage executed

on August 27, 1996 was thus amended[5] to increase the principal amount of loan secured by Claiming that the extrajudicial foreclosure was void, respondents filed a complaint for

the mortgage to P5,000,000.00. Nullification of the Foreclosure Proceedings and Damages with Prayer for Temporary

Restraining Order/Injunction[14] with the RTC of Santiago City. They alleged non-compliance

Subsequently, respondents obtained additional loans from Metrobank - P1,000,000.00 with the provisions of Presidential Decree No. 1079[15] and Act No. 3135,[16]particularly the

on December 3, 1996, and P1,000,000.00 on May 8, 1997. The additional loans were secured publication requirement. Respondents further asserted that Metrobank required them to

sign blank promissory notes and real estate mortgage, and that they were not furnished with
 26

1) DECLARING as null and void the Sheriffs Certificate of Sale,

copies of these documents. Later, they discovered that the terms and conditions of the dated November 27, 2000, Exhibit 11;
promissory notes and of the mortgage were entirely different from what was represented to
2) DECLARING as null and void the Sheriffs Final Deed of Sale,
them by the bank. The right to fix the interest rates, they added, was dated December 21, 2000, Exhibit 12;
exclusively given to the bank. Respondents, thus, prayed for the annulment of the
3) CANCELLING [Metrobanks] TCT Nos. T-319236 (Exhibit 13); T-
extrajudicial foreclosure proceedings. 319235 over Lot 6-B-18 (Exhibit 14); T-T-319235 over Lot 4-F
(Exhibit 15); and T-319237 (Exhibit 16);

4) RESTORING [respondents] TCT Nos. T-260279 (Exhibit E); T-

Metrobank answered the complaint, denying its material allegations and asserting the
202288 (Exhibit F); T-180503 (Exhibit G; and T- 272664 (Annex
validity of the foreclosure proceedings. Specifically, it averred compliance with the posting E); and

and publication requirements. Thus, it prayed for the dismissal of the complaint.[17] 5) ORDERING x x x Metrobank to pay PHP50,000.00 as
attorneys fees, and the cost of suit.

Meanwhile, on December 20, 2001, Metrobank caused the cancellation of the TCTs in the SO ORDERED. [20]

name of respondents and the issuance of new ones in its name. On December 21, 2001,

the Ex-Officio Sheriff executed a Final Deed of Sale.[18]

Metrobank filed a motion for reconsideration, but the RTC denied it on July 31, 2006.

On June 16, 2006, the RTC rendered a decision[19] annulling the extrajudicial foreclosure
Metrobank then appealed to the CA, faulting the RTC for annulling the foreclosure
proceedings. The RTC reviewed the records of the foreclosure proceedings and found no
proceedings. It insisted that the bank complied with the publication requirement. Metrobank
proof of publication of the sheriffs notice of sale; there was no affidavit of publication
also disagreed with the trial courts finding of overpayment of interests amounting
attached to the records. This fatal defect, it held, invalidated the auction sale and the entire
to P1,529,922.00, claiming that the applicable interest rates on respondents loans were 17%
foreclosure proceedings. The RTC further held that, when Metrobank foreclosed the
and not 12% as computed by the trial court. It further asserted that a final deed of sale is not
mortgaged properties, respondents loan account was still outstanding for there was an
necessary for purposes of consolidating its ownership over the subject properties. Finally,
overpayment of interests amounting to P1,529,922.00. Thus, the foreclosure proceedings
Metrobank assailed the award of attorneys fees for lack of basis.
were without factual and legal basis. The RTC further noted that Metrobank consolidated its

title even before the issuance of the sheriffs Final Deed of Sale. The trial court considered it
On June 30, 2008, the CA resolved Metrobanks appeal in this wise:
an irregularity sufficient to invalidate the consolidation.

The dispositive portion of the RTC decision reads:

WHEREFORE, the appeal is DISMISSED. The assailed decision dated June
16, 2006 of the RTC of Santiago City, Branch 35, in Civil Case No. 35-3022
WHEREFORE, premises considered, judgment is hereby rendered in favor is AFFIRMED.
of [respondents] and against [petitioner] Metrobank as follows:
SO ORDERED.[21]
 27

Metrobanks motion for reconsideration also suffered the same fate, as the CA denied it on
Metrobank makes much ado of respondents failure to present proof of non-compliance with
May 7, 2009.[22]
the publication requirement. It insists that respondents failed to discharge the requisite

burden of proof.
Before us, Metrobank insists on the validity of the foreclosure proceedings. Essentially, it

argues that foreclosure proceedings enjoy the presumption of regularity, and the party
Apparently, Metrobank lost sight of our ruling in Spouses Pulido v. CA,[25] Sempio v.
alleging irregularity has the burden of proving his claim. Metrobank asserts that, in this case,
CA,[26] and, recently, in Philippine Savings Bank v. Spouses Dionisio Geronimo and Caridad
the presumption of regularity was not disputed because respondents failed to prove that the
Geronimo,[27] viz.:
notice of sale was not published as required by law.

While it may be true that the party alleging non-compliance with the
requisite publication has the burden of proof, still negative allegations
At the outset, it must be stated that only questions of law may be raised before this Court in need not be proved even if essential to ones cause of action or defense if
a Petition for Review under Rule 45 of the Revised Rules of Civil Procedure. This Court is not a they constitute a denial of the existence of a document the custody of
which belongs to the other party.
trier of facts, and it is not the function of this Court to reexamine the evidence submitted by

the parties.[23]
It would have been a simple matter for Metrobank to rebut the allegation of non-compliance

by producing the required proof of publication. Yet, Metrobank opted not to rebut the
It has been our consistent ruling that the question of compliance or non-compliance with
allegation; it simply relied on the presumption of regularity in the performance of official
notice and publication requirements of an extrajudicial foreclosure sale is a factual issue, and
duty.
the resolution thereof by the trial court is generally binding on this Court. The matter of

sufficiency of posting and publication of a notice of foreclosure sale need not be resolved
Unfortunately, Metrobanks reliance on the presumption of regularity must fail because it did
by this Court, especially when the findings of the RTC were sustained by the CA. Well-
not present any proof of publication of the notice of sale. As held by this Court in Spouses
established is the rule that factual findings of the CA are conclusive on the parties and carry
Pulido v. Court of Appeals:[28]
even more weight when the said court affirms the factual findings of the trial court.[24]

[P]etitioners' reliance on the presumption of regularity in the

The unanimity of the CA and the trial court in their factual ascertainment that there was non- performance of official duties falls in the face of a serious imputation on
non-compliance. The presumption of compliance with official duty is
compliance with the publication requirement bars us from supplanting their findings and rebutted by failure to present proof of posting.
substituting them with our own. Metrobank has not shown that they are entitled to an Further, in Philippine Savings Bank v. Spouses Dionisio Geronimo and Caridad
exception to this rule. It has not sufficiently demonstrated any special circumstances to Geronimo,[29] this Court rejected a similar contention, viz.:
justify a factual review.
 28

Petitioner's invocation of the presumption of regularity in the

performance of official duty on the part of Sheriff Castillo is misplaced. intention to take judicial notice of the records of the extrajudicial proceedings, as required by
While posting the notice of sale is part of a sheriff's official functions, the Section 3[32] of Rule 129. Metrobank, thus, contends that the RTC exceeded its authority in
actual publication of the notice of sale cannot be considered as such,
since this concerns the publisher's business. Simply put, the sheriff is taking cognizance of the records of the extrajudicial proceedings.
incompetent to prove that the notice of sale was actually published in a
newspaper of general circulation.
We disagree.
As correctly found by the RTC and the CA, the records [30] of the foreclosure proceedings

lacked any proof of publication. This explains why Metrobank could not present any proof of As a rule, courts do not take judicial notice of the evidence presented in other proceedings,
publication. even if these have been tried or are pending in the same court or before the same judge. This

rule, however, is not absolute.

We take this occasion to reiterate that the object of a notice of sale is to inform the public of

the nature and condition of the property to be sold, and of the time, place, and terms of the In Juaban v. Espina[33] and G Holdings, Inc. v. National Mines and Allied Workers Union Local
sale. Notices are given for the purpose of securing bidders and preventing a sacrifice sale of 103 (NAMAWU),[34] we held that, in some instances, courts have also taken judicial notice of
the property. proceedings in other cases that are closely connected to the matter in controversy. These

cases may be so closely interwoven, or so clearly interdependent, as to invoke a rule of

The goal of the notice requirement is to achieve a reasonably wide publicity of the auction judicial notice.
sale. This is why publication in a newspaper of general circulation is required. The Court has

previously taken judicial notice of the far-reaching effects of publishing the notice of sale in a The RTC, therefore, acted well within its authority in taking cognizance of the records of the
newspaper of general circulation. Thus, the publication of the notice of sale was held extrajudicial foreclosure proceedings, and the CA cannot be faulted for sustaining the RTC.
essential to the validity of foreclosure proceedings. [31] In this case, Metrobank failed to

establish compliance with the publication requirement. The RTC and the CA cannot, Metrobank further questions the trial courts finding of overpayment of interests. But like the
therefore, be faulted for nullifying the foreclosure proceedings. issue on compliance with the publication requirement, the issue on overpayment of interests

involves the ascertainment of facts not subject of review by this Court. We reiterate that our
Metrobank next questions the authority of the RTC and the CA to take cognizance of the jurisdiction is limited to reviewing and revising errors of law imputed to the lower court, the
records of the foreclosure proceedings as basis for annulling the auction sale. It claims that latters findings of fact being conclusive and not reviewable by this Court.[35]
the trial court may not take judicial notice of the records of proceedings in another case,
unless the parties themselves agreed to it. Metrobank asserts that it did not give its consent Besides, we find nothing erroneous in this factual finding of the RTC. As explained by the RTC
to the trial courts examination of the records of the extrajudicial foreclosure in its decision:
proceedings. Further, the RTC did not even set a hearing for the purpose of declaring its
 29

[T]he Court notes that the original promissory notes evidencing the without factual and legal basis, too. For, indeed, when the foreclosure
various loans of the plaintiffs were not presented in court by either party; proceedings in question was conducted, [respondents] loan account with
they are needed to determine the stipulated interest rate. The Court is [Metrobank], as it is said, was still outstanding, because [respondents]
thus left to determine the same based on the testimony of the plaintiffs were able to pay the interest due. Therefore, the Court is again convinced
that the agreed interest rate is 12% per annum; amazingly, this was not that the nullification prayed for is in order.[36]
denied or refuted by the [petitioner] bank, in which case, 12% interest
rate is applied at least for the period beginning 1997 until 1999, when the
loan was renewed under the two (2) new promissory notes which We need not say more.
indicated a higher rate of interest of 17.250% per annum. As mentioned
above, the interest payments made by the [respondents] were already
admitted by [Metrobank] in its answer to the complaint as well as in its
In fine, the right of a bank to foreclose a mortgage upon the mortgagor's failure to pay his
comment to [respondents] formal offer of evidence, and such interest
payments are duly reflected and contained in the passbook account of obligation must be exercised according to its clear mandate, and every requirement of the
the [respondents], Exhibit H, H-1 to H-10. But, in order to determine
whether [respondents] account has become past due or not, as the law must be complied with, or the valid exercise of the right would end. The exercise of a
[petitioner] bank represents, the Court deems it necessary to undertake
right ends when the right disappears, and it disappears when it is abused especially to the
some mathematical computation the result of which would decisively
guide the Court to arrive at a rightful conclusion, thus: prejudice of others.[37]

1) Total interest payments by [respondents] As further declared by this Court in Philippine Savings Bank v. Spouses Dionisio Geronimo and
from May 7, 1997 to June 30, 1999 - P3,332,422.00 Caridad Geronimo:[38]
2) Interest due
from May 7, 1997 to June 30, 1999 - P1,802,500.00 While the law recognizes the right of a bank to foreclose a mortgage
computed as follows: upon the mortgagor's failure to pay his obligation, it is imperative that
such right be exercised according to its clear mandate. Each and every
a) 1st year (P7 M x 12%), from May 7, 1997 to May 28, 1998 - P 840,000.00 requirement of the law must be complied with, lest, the valid exercise of
the right would end. It must be remembered that the exercise of a right
b) 2nd year ends when the right disappears, and it disappears when it is abused
i) from June 3, 1998 to Feb. 24, 1999 (8 mos.) - P 560,000.00 ii) from March, 1999 especially to the prejudice of others.
to June 30, 1999 (4 mos.) - P 402,500.00
3) Total Interest paid - P 3,332,422.00 We, therefore, affirm the CA and sustain the RTC in nullifying the extrajudicial foreclosure of
Less Interest due - P 1,802,500.00
Overpaid interest - P 1,529,922.00 real estate mortgage and sale, including Metrobanks title.

From the foregoing, it is evident that [respondents] overpaid interests for With this disquisition, we find no necessity to discuss the issue of the validity of the
the period of two (2) years, from May 1997 to June 1999, in the total
amount of Php. 1,529,922.00. Thus, the Court is convinced that it is just consolidation of title by Metrobank.
and equitable that such an overpayment be construed as advance
interest payments which should be applied for the succeeding period or
WHEREFORE, the petition is DENIED. The challenged Decision and Resolution of the Court of
year of their contract.Otherwise, [Metrobank] would unjustly enrich itself
at the expense of [respondents]. In such a case, it was premature then for Appeals in CA-G.R. CV No. 87775 are AFFIRMED.
[Metrobank] to declare [respondents] account as past due, because at
that juncture[, respondents] loan obligation was outstanding and in
declaring otherwise, [Metrobanks] action was without basis as there was
SO ORDERED.
no violation of their loan contract. Consequently, it follows that the
foreclosure proceedings subsequently held on November 26, 2000 was
 30

SECOND DIVISION another flight and purchased two tickets from American Airlines at a cost of Nine Hundred
Eighteen ($918.00) Dollars.
G.R. No. 104235 November 18, 1993
Upon their arrival in the Philippines, petitioners filed an action for damages based on breach
SPOUSES CESAR & SUTHIRA ZALAMEA and LIANA ZALAMEA, petitioners, of contract of air carriage before the Regional Trial Court of Makati, Metro Manila, Branch
vs. 145. As aforesaid, the lower court ruled in favor of petitioners in its decision 1 dated January
HONORABLE COURT OF APPEALS and TRANSWORLD AIRLINES, INC., respondents. 9, 1989 the dispositive portion of which states as follows:

NOCON, J.: WHEREFORE, judgment is hereby rendered ordering the defendant to pay
plaintiffs the following amounts:
Disgruntled over TransWorld Airlines, Inc.'s refusal to accommodate them in TWA Flight 007
departing from New York to Los Angeles on June 6, 1984 despite possession of confirmed (1) US $918.00, or its peso equivalent at the time of payment
tickets, petitioners filed an action for damages before the Regional Trial Court of Makati, representing the price of the tickets bought by Suthira and Liana Zalamea
Metro Manila, Branch 145. Advocating petitioner's position, the trial court categorically ruled from American Airlines, to enable them to fly to Los Angeles from New
that respondent TransWorld Airlines (TWA) breached its contract of carriage with petitioners York City;
and that said breach was "characterized by bad faith." On appeal, however, the appellate
court found that while there was a breach of contract on respondent TWA's part, there was (2) US $159.49, or its peso equivalent at the time of payment,
neither fraud nor bad faith because under the Code of Federal Regulations by the Civil representing the price of Suthira Zalamea's ticket for TWA Flight 007;
Aeronautics Board of the United States of America it is allowed to overbook flights.
(3) Eight Thousand Nine Hundred Thirty-Four Pesos and Fifty Centavos
The factual backdrop of the case is as follows: (P8,934.50, Philippine Currency, representing the price of Liana Zalamea's
ticket for TWA Flight 007,
Petitioners-spouses Cesar C. Zalamea and Suthira Zalamea, and their daughter, Liana
Zalamea, purchased three (3) airline tickets from the Manila agent of respondent TransWorld (4) Two Hundred Fifty Thousand Pesos (P250,000.00), Philippine
Airlines, Inc. for a flight to New York to Los Angeles on June 6, 1984. The tickets of Currency, as moral damages for all the plaintiffs'
petitioners-spouses were purchased at a discount of 75% while that of their daughter was a
full fare ticket. All three tickets represented confirmed reservations. (5) One Hundred Thousand Pesos (P100,000.00), Philippine Currency, as
and for attorney's fees; and
While in New York, on June 4, 1984, petitioners received notice of the reconfirmation of their
reservations for said flight. On the appointed date, however, petitioners checked in at 10:00 (6) The costs of suit.
a.m., an hour earlier than the scheduled flight at 11:00 a.m. but were placed on the wait-list
because the number of passengers who had checked in before them had already taken all
SO ORDERED. 2
the seats available on the flight. Liana Zalamea appeared as the No. 13 on the wait-list while
the two other Zalameas were listed as "No. 34, showing a party of two." Out of the 42 names
on the wait list, the first 22 names were eventually allowed to board the flight to Los Angeles, On appeal, the respondent Court of Appeals held that moral damages are recoverable in a
including petitioner Cesar Zalamea. The two others, on the other hand, at No. 34, being damage suit predicated upon a breach of contract of carriage only where there is fraud or
ranked lower than 22, were not able to fly. As it were, those holding full-fare tickets were bad faith. Since it is a matter of record that overbooking of flights is a common and accepted
given first priority among the wait-listed passengers. Mr. Zalamea, who was holding the full- practice of airlines in the United States and is specifically allowed under the Code of Federal
fare ticket of his daughter, was allowed to board the plane; while his wife and daughter, who Regulations by the Civil Aeronautics Board, no fraud nor bad faith could be imputed on
presented the discounted tickets were denied boarding. According to Mr. Zalamea, it was respondent TransWorld Airlines.
only later when he discovered the he was holding his daughter's full-fare ticket.
Moreover, while respondent TWA was remiss in not informing petitioners that the flight was
Even in the next TWA flight to Los Angeles Mrs. Zalamea and her daughter, could not be overbooked and that even a person with a confirmed reservation may be denied
accommodated because it was also fully booked. Thus, they were constrained to book in accommodation on an overbooked flight, nevertheless it ruled that such omission or
 31

negligence cannot under the circumstances be considered to be so gross as to amount to bad . . . IN NOT ORDERING THE REFUND OF LIANA ZALAMEA'S TWA TICKET
faith. AND PAYMENT FOR THE AMERICAN AIRLINES
TICKETS. 5
Finally, it also held that there was no bad faith in placing petitioners in the wait-list along
with forty-eight (48) other passengers where full-fare first class tickets were given priority That there was fraud or bad faith on the part of respondent airline when it did not allow
over discounted tickets. petitioners to board their flight for Los Angeles in spite of confirmed tickets cannot be
disputed. The U.S. law or regulation allegedly authorizing overbooking has never been
The dispositive portion of the decision of respondent Court of Appeals 3 dated October 25, proved. Foreign laws do not prove themselves nor can the courts take judicial notice of them.
1991 states as follows: Like any other fact, they must be alleged and proved. 6 Written law 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 with a certificate that such officer has custody.
WHEREFORE, in view of all the foregoing, the decision under review is
The certificate may be made by a secretary of an embassy or legation, consul general, consul,
hereby MODIFIED in that the award of moral and exemplary damages to
vice-consul, or consular agent or by any officer in the foreign service of the Philippines
the plaintiffs is eliminated, and the defendant-appellant is hereby
stationed in the foreign country in which the record is kept, and authenticated by the seal of
ordered to pay the plaintiff the following amounts:
his office. 7

(1) US$159.49, or its peso equivalent at the time of the payment,

Respondent TWA relied solely on the statement of Ms. Gwendolyn Lather, its customer
representing the price of Suthira Zalamea's ticket for TWA Flight 007;
service agent, in her deposition dated January 27, 1986 that the Code of Federal Regulations
of the Civil Aeronautics Board allows overbooking. Aside from said statement, no official
(2) US$159.49, or its peso equivalent at the time of the payment, publication of said code was presented as evidence. Thus, respondent court's finding that
representing the price of Cesar Zalamea's ticket for TWA Flight 007; overbooking is specifically allowed by the US Code of Federal Regulations has no basis in fact.

(3) P50,000.00 as and for attorney's fees. Even if the claimed U.S. Code of Federal Regulations does exist, the same is not applicable to
the case at bar in accordance with the principle of lex loci contractus which require that the
(4) The costs of suit. law of the place where the airline ticket was issued should be applied by the court where the
passengers are residents and nationals of the forum and the ticket is issued in such State by
SO ORDERED. 4 the defendant airline. 8 Since the tickets were sold and issued in the Philippines, the
applicable law in this case would be Philippine law.

Not satisfied with the decision, petitioners raised the case on petition for review
on certiorari and alleged the following errors committed by the respondent Court of Appeals, Existing jurisprudence explicitly states that overbooking amounts to bad faith, entitling the
to wit: passengers concerned to an award of moral damages. In Alitalia Airways v. Court of
Appeals, 9 where passengers with confirmed bookings were refused carriage on the last
minute, this Court held that when an airline issues a ticket to a passenger confirmed on a
I. particular flight, on a certain date, a contract of carriage arises, and the passenger has every
right to expect that he would fly on that flight and on that date. If he does not, then the
. . . IN HOLDING THAT THERE WAS NO FRAUD OR BAD FAITH ON THE carrier opens itself to a suit for breach of contract of carriage. Where an airline had
PART OF RESPONDENT TWA BECAUSE IT HAS A RIGHT TO OVERBOOK deliberately overbooked, it took the risk of having to deprive some passengers of their seats
FLIGHTS. in case all of them would show up for the check in. For the indignity and inconvenience of
being refused a confirmed seat on the last minute, said passenger is entitled to an award of
II. moral damages.

. . . IN ELIMINATING THE AWARD OF EXEMPLARY DAMAGES. Similarly, in Korean Airlines Co., Ltd. v. Court of Appeals, 10 where private respondent was not
allowed to board the plane because her seat had already been given to another passenger
even before the allowable period for passengers to check in had lapsed despite the fact that
III.
she had a confirmed ticket and she had arrived on time, this Court held that petitioner airline
 32

acted in bad faith in violating private respondent's rights under their contract of carriage and it present any argument of substance to show that petitioners were duly apprised of the
is therefore liable for the injuries she has sustained as a result. overbooked condition of the flight or that there is a hierarchy of boarding priorities in
booking passengers. It is evident that petitioners had the right to rely upon the assurance of
In fact, existing jurisprudence abounds with rulings where the breach of contract of carriage respondent TWA, thru its agent in Manila, then in New York, that their tickets represented
amounts to bad faith. In Pan American World Airways, Inc. v. Intermediate Appellate confirmed seats without any qualification. The failure of respondent TWA to so inform them
Court, 11 where a would-be passenger had the necessary ticket, baggage claim and clearance when it could easily have done so thereby enabling respondent to hold on to them as
from immigration all clearly and unmistakably showing that she was, in fact, included in the passengers up to the last minute amounts to bad faith. Evidently, respondent TWA placed its
passenger manifest of said flight, and yet was denied accommodation in said flight, this Court self-interest over the rights of petitioners under their contracts of carriage. Such conscious
did not hesitate to affirm the lower court's finding awarding her damages. disregard of petitioners' rights makes respondent TWA liable for moral damages. To deter
breach of contracts by respondent TWA in similar fashion in the future, we adjudge
respondent TWA liable for exemplary damages, as well.
A contract to transport passengers is quite different in kind and degree from any other
contractual relation. So ruled this Court in Zulueta v. Pan American World Airways, Inc. 12 This
is so, for a contract of carriage generates a relation attended with public duty — a duty to Petitioners also assail the respondent court's decision not to require the refund of Liana
provide public service and convenience to its passengers which must be paramount to self- Zalamea's ticket because the ticket was used by her father. On this score, we uphold the
interest or enrichment. Thus, it was also held that the switch of planes from Lockheed 1011 respondent court. Petitioners had not shown with certainty that the act of respondent TWA
to a smaller Boeing 707 because there were only 138 confirmed economy class passengers in allowing Mr. Zalamea to use the ticket of her daughter was due to inadvertence or
who could very well be accommodated in the smaller planes, thereby sacrificing the comfort deliberate act. Petitioners had also failed to establish that they did not accede to said
of its first class passengers for the sake of economy, amounts to bad faith. Such inattention agreement. The logical conclusion, therefore, is that both petitioners and respondent TWA
and lack of care for the interest of its passengers who are entitled to its utmost consideration agreed, albeit impliedly, to the course of action taken.
entitles the passenger to an award of moral damages. 13
The respondent court erred, however, in not ordering the refund of the American Airlines
Even on the assumption that overbooking is allowed, respondent TWA is still guilty of bad tickets purchased and used by petitioners Suthira and Liana. The evidence shows that
faith in not informing its passengers beforehand that it could breach the contract of carriage petitioners Suthira and Liana were constrained to take the American Airlines flight to Los
even if they have confirmed tickets if there was overbooking. Respondent TWA should have Angeles not because they "opted not to use their TWA tickets on another TWA flight" but
incorporated stipulations on overbooking on the tickets issued or to properly inform its because respondent TWA could not accommodate them either on the next TWA flight which
passengers about these policies so that the latter would be prepared for such eventuality or was also fully booked. 14 The purchase of the American Airlines tickets by petitioners Suthira
would have the choice to ride with another airline. and Liana was the consequence of respondent TWA's unjustifiable breach of its contracts of
carriage with petitioners. In accordance with Article 2201, New Civil Code, respondent TWA
should, therefore, be responsible for all damages which may be reasonably attributed to the
Respondent TWA contends that Exhibit I, the detached flight coupon upon which were
non-performance of its obligation. In the previously cited case of Alitalia Airways v. Court of
written the name of the passenger and the points of origin and destination, contained such a
Appeals, 15 this Court explicitly held that a passenger is entitled to be reimbursed for the cost
notice. An examination of Exhibit I does not bear this out. At any rate, said exhibit was not
of the tickets he had to buy for a flight to another airline. Thus, instead of simply being
offered for the purpose of showing the existence of a notice of overbooking but to show that
refunded for the cost of the unused TWA tickets, petitioners should be awarded the actual
Exhibit I was used for flight 007 in first class of June 11, 1984 from New York to Los Angeles.
cost of their flight from New York to Los Angeles. On this score, we differ from the trial
court's ruling which ordered not only the reimbursement of the American Airlines tickets but
Moreover, respondent TWA was also guilty of not informing its passengers of its alleged also the refund of the unused TWA tickets. To require both prestations would have enabled
policy of giving less priority to discounted tickets. While the petitioners had checked in at the petitioners to fly from New York to Los Angeles without any fare being paid.
same time, and held confirmed tickets, yet, only one of them was allowed to board the plane
ten minutes before departure time because the full-fare ticket he was holding was given
The award to petitioners of attorney's fees is also justified under Article 2208(2) of the Civil
priority over discounted tickets. The other two petitioners were left behind.
Code which allows recovery when the defendant's act or omission has compelled plaintiff to
litigate or to incur expenses to protect his interest. However, the award for moral damages
It is respondent TWA's position that the practice of overbooking and the airline system of and exemplary damages by the trial court is excessive in the light of the fact that only Suthira
boarding priorities are reasonable policies, which when implemented do not amount to bad and Liana Zalamea were actually "bumped off." An award of P50,000.00 moral damages and
faith. But the issue raised in this case is not the reasonableness of said policies but whether another P50,000.00 exemplary damages would suffice under the circumstances obtaining in
or not said policies were incorporated or deemed written on petitioners' contracts of the instant case.
carriage. Respondent TWA failed to show that there are provisions to that effect. Neither did
 33

WHEREFORE, the petition is hereby GRANTED and the decision of the respondent Court of Upon their arrival in the Philippines, the spouses Zalamea filed an action for damages based
Appeals is hereby MODIFIED to the extent of adjudging respondent TransWorld Airlines to on breach of contract of air carriage before the RTC of Makati which rendered a decision in
pay damages to petitioners in the following amounts, to wit: their favor ordering the TWA to pay the price of the tickets bought from American Airlines
together with moral damages and attorney’s fees. On appeal, the CA held that moral
(1) US$918.00 or its peso equivalent at the time of payment representing the price of the damages are recoverable in a damage suit predicated upon a breach of contract of carriage
tickets bought by Suthira and Liana Zalamea from American Airlines, to enable them to fly to
only where there is fraud or bad faith. It further stated that since it is a matter of record that
Los Angeles from New York City;
overbooking of flights is a common and accepted practice of airlines in the United States and
is specifically allowed under the Code of Federal Regulations by the Civil Aeronautics Board,
(2) P50,000.00 as moral damages;
neither fraud nor bad faith could be imputed on TWA.
(3) P50,000.00 as exemplary damages;
ISSUE: Whether or not the CA erred in accepting the finding that overbooking is specifically
allowed by the US Code of Federal Regulations and in holding that there was no fraud or bad
(4) P50,000.00 as attorney's fees; and
faith on the part of TWA ?

(5) Costs of suit. HELD:

SO ORDERED. The CA was in error. There was fraud or bad faith on the part of TWA when it did not allow
Mrs. Zalamea and her daughter to board their flight for Los Angeles in spite of confirmed
FACTS: tickets. The US law or regulation allegedly authorizing overbooking has never been proved.

Spouses Cesar and Suthira Zalamea, and their daughter, Liana Zalamea, purchased three (3) 1.) Foreign laws do not prove themselves nor can the court take judicial notice of them. Like
airline tickets from the Manila agent of respondent TransWorld Airlines, Inc. (TWA) for a any other fact, they must be alleged and proved. Written law may be evidenced by an official
flight from New York to Los Angeles on June 6, 1984. The tickets of the spouses were publication thereof or by a copy attested by the officers having legal custody of the record, or
purchased at a discount of 75% while that of their daughter was a full fare ticket. All three by his deputy and accompanied with a certificate that such officer has custody. The
tickets represented confirmed reservations. certificate may be made by a secretary of an embassy or legation, consul-general, consul,
vice-consul, or consular agent or by any officer in the foreign service of the Phil. stationed in
While in New York, on June 4, 1984, the spouses Zalamea and their daughter received a the foreign country in which the record is kept and authenticated by the seal of his office.
notice of reconfirmation of their reservations for said flight. On the appointed date, however, Here, TWA relied solely on the testimony of its customer service agent in her deposition that
the spouses Zalamea and their daughter checked in at 10:00 am, an hour earlier than the the Code of Federal Regulations of the Civil Aeronautic Board allows overbooking. Aside from
scheduled flight at 11:00 am but were placed on the wait-list because the number of said statement, no official publication of said code was presented as evidence. Thus, the CA’s
passengers who checked in before tem had already taken all the seats available on the flight. finding that overbooking is specifically allowed by the US Code of Federal Regulations has no
basis in fact.
Out of the 42 names on the wait-list, the first 22 names were eventually allowed to board the
flight to Los Angeles, including Cesar Zalamea. The two others, on the other hand, being "That there was fraud or bad faith on the part of respondent airline when it did not allow
ranked lower than 22, were not able to fly. As it were, those holding full-fare ticket were petitioners to board their flight for Los Angeles in spite of confirmed tickets cannot be
given first priority among the wait-listed passengers. Mr. Zalamea, who was holding the full- disputed. The U.S. law or regulation allegedly authorizing overbooking has never been
fare ticket of his daughter, was allowed to board the plane; while his wife and daughter, who proved. Foreign laws do not prove themselves nor can the courts take judicial notice of them.
presented the discounted tickets were denied boarding. Even in the next TWA flight to Los Like any other fact, they must be alleged and proved. Written law may be evidenced by an
Angeles, Mrs. Zalamea and her daughter, could not be accommodated because it was full official publication thereof or by a copy attested by the officer having the legal custody of the
booked. Thus, they were constrained to book in another flight and purchased two tickets record, or by his deputy, and accompanied with a certificate that such officer has custody.
from American Airlines. The certificate may be made by a secretary of an embassy or legation, consul general, consul,
 34

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.

Respondent TWA relied solely on the statement of Ms. Gwendolyn Lather, its customer
service agent, in her deposition dated January 27, 1986 that the Code of Federal Regulations
of the Civil Aeronautics Board allows overbooking. Aside from said statement, no official
publication of said code was presented as evidence. Thus, respondent court's finding that
overbooking is specifically allowed by the US Code of Federal Regulations has no basis in
fact."

"Even if the claimed U.S. Code of Federal Regulations does exist, the same is not applicable to
the case at bar in accordance with the principle of lex loci contractus which require that the
law of the place where the airline ticket was issued should be applied by the court where the
passengers are residents and nationals of the forum and the ticket is issued in such State by
the defendant airline. Since the tickets were sold and issued in the Philippines, the applicable
law in this case would be Philippine law."

Other Issues:

2.) Even if the claimed US Code of Federal Regulations does exist, the same is not applicable
to the case at bar in accordance with the principle of lex loci contractus which requires that
the law of the place where the airline ticket was issued should be applied by the court where
the passengers are residents and nationals of the forum and the ticket is issued in such State
by the airline.

3.) Existing jurisprudence explicitly states that overbooking amounts to bad faith, entitling
the passengers concerned to an award of moral damages. Where an airline had deliberately
overbooked, it took the risk of having to deprive some passengers of their seats in case all of
them would show up for check in. for the indignity and inconvenience of being refused a
confirmed seat on the last minute, said passenger is entitled to an award of moral damages.
This is so, for a contract of carriage generates a relation attended with public duty --- a duty
to provide public service and convenience to its passengers which must be paramount to
self-interest or enrichment. Even on the assumption that overbooking is allowed, TWA is still
guilty of bad faith in not informing its passengers beforehand that it could breach the
contract of carriage even if they have confirmed tickets if there was overbooking. Moreover,
TWA was also guilty of not informing its passengers of its alleged policy of giving less priority
to discounted tickets. Evidently, TWA placed self-interest over the rights of the spouses
Zalamea and their daughter under their contract of carriage. Such conscious disregard make
respondent TWA liable for moral damages, and to deter breach of contracts by TWA in
similar fashion in the future, the SC adjudged TWA liable for exemplary damages, as well.
 35

FIRST DIVISION
obtained loans from Metropolitan Bank and Trust Company (Metrobank)[5] and Private

REPUBLIC GLASS CORPORATION G.R. No. 144413

Development Corporation of the Philippines[6] (PDCP) with RGC, Gervel and Qua as sureties.
and GERVEL, INC.,

Petitioners, Present: Among themselves, RGC, Gervel and Qua executed Agreements for Contribution, Indemnity
Promulgated:
and Pledge of Shares of Stocks (Agreements).[7]
LAWRENCE C. QUA,

Respondent. July 30, 2004

x-----------------------------------------------------------------------------------------x The Agreements all state that in case of default in the payment of Ladteks loans, the parties

would reimburse each other the proportionate share of any sum that any might pay to the

DECISION creditors.[8] Thus, a common provision appears in the Agreements:

CARPIO, J.: RGC, GERVEL and QUA each covenant that each will respectively
reimburse the party made to pay the Lenders to the extent and subject to
The Case the limitations set forth herein, all sums of money which the party made
to pay the Lenders shall pay or become liable to pay by reason of any of
the foregoing, and will make such payments within five (5) days from the
Before the Court is a petition for review[1] assailing the 6 March 2000 Decision[2] and the 26 date that the party made to pay the Lenders gives written notice to the
parties hereto that it shall have become liable therefor and has advised
the Lenders of its willingness to pay whether or not it shall have already
July 2000 Resolution of the Court of Appeals in CA-G.R. CV No. 54737. The Court of Appeals paid out such sum or any part thereof to the Lenders or to the persons
entitled thereto. (Emphasis supplied)
set aside the Order[3] of 3 May 1996 of the Regional Trial Court of Makati, Branch 63 (RTC-

Under the same Agreements, Qua pledged 1,892,360 common shares of stock of General
Branch 63), in Civil Case No. 88-2643 and reinstated the Decision[4] of 12 January 1996 in

Milling Corporation (GMC) in favor of RGC and Gervel. The pledged shares of stock served as
respondents favor.
security for the payment of any sum which RGC and Gervel may be held liable under the
The Facts
Agreements.
Petitioners Republic Glass Corporation (RGC) and Gervel, Inc. (Gervel) together with
Ladtek defaulted on its loan obligations to Metrobank and PDCP. Hence, Metrobank filed a

respondent Lawrence C. Qua (Qua) were stockholders of Ladtek, Inc. (Ladtek). Ladtek collection case against Ladtek, RGC, Gervel and Qua docketed as Civil Case No. 8364
 36

8. The foregoing facts show that the payment of defendants

(Collection Case No. 8364) which was raffled to the Regional Trial Court of Makati, Branch Republic Glass Corporation and Gervel, Inc. was for the entire
obligation covered by the Continuing Surety Agreements which were
149 (RTC-Branch 149). During the pendency of Collection Case No. 8364,RGC and Gervel paid Annexes B and C of the Complaint, and that the same naturally
redound[ed] to the benefit of defendant Qua herein, as provided for by
Metrobank P7 million. Later, Metrobank executed a waiver and quitclaim dated 7 September law, specifically Article 1217 of the Civil Code, which states that:

1988 in favor of RGC and Gervel. Based on this waiver and quitclaim,[9] Metrobank, RGC and 10. It is very clear that the payment of defendants Republic Glass
Corporation and Gervel, Inc. was much more than the amount stipulated
Gervel filed on 16 September 1988 a joint motion to dismiss Collection Case No. 8364 against in the Continuing Surety Agreement which is the basis for the action
against them and defendant Qua, which was just SIX MILLION TWO
RGC and Gervel. Accordingly, RTC-Branch 149 dismissed the case against RGC and Gervel, HUNDRED [THOUSAND] PESOS (P6,200,000.00), hence, logically the said
alleged obligation must now be considered as fully paid and extinguished.
leaving Ladtek and Qua as defendants.[10]

RGC and Gervel likewise offered as evidence in Foreclosure Case No. 88-2643 the Order
In a letter dated 7 November 1988, RGC and Gervels counsel, Atty. Antonio C. Pastelero,
dismissing Collection Case No. 8364,[14] which RTC-Branch 149 subsequently reversed on
demanded that Qua pay P3,860,646, or 42.22% of P8,730,543.55,[11] as reimbursement of the
Metrobanks motion for reconsideration. Thus, RTC-Branch 149 reinstated Collection Case No.

total amount RGC and Gervel paid to Metrobank and PDCP. Qua refused to reimburse the 8364 against Qua.

amount to RGC and Gervel. Subsequently, RGC and Gervel furnished Qua with notices of
On 12 January 1996, RTC-Branch 63 rendered a Decision in Foreclosure Case No. 88-2643 (12
foreclosure of Quas pledged shares.

Qua filed a complaint for injunction and damages with application for a temporary January 1996 Decision) ordering RGC and Gervel to return the foreclosed shares of stock to

restraining order, docketed as Civil Case No. 88-2643 (Foreclosure Case No. 88-2643), with
Qua. The dispositive portion of the 12 January 1996 Decision reads:
RTC-Branch 63 to prevent RGC and Gervel from foreclosing the pledged shares. Although it
WHEREFORE, premises considered, this Court hereby renders judgment
issued a temporary restraining order on 9 December 1988, RTC-Branch 63 denied on 2 ordering defendants jointly and severally liable to return to plaintiff the
1,892,360 shares of common stock of General Milling Corporation which
January 1989 Quas Urgent Petition to Suspend Foreclosure Sale. RGC and Gervel eventually they foreclosed on December 9, 1988, or should the return of these
shares be no longer possible then to pay to plaintiff the amount
foreclosed all the pledged shares of stock at public auction. Thus, Quas application for the of P3,860,646.00 with interest at 6% per annum from December 9, 1988
until fully paid and to pay plaintiff P100,000.00 as and for attorneys
issuance of a preliminary injunction became moot.[12]
fees. The costs will be for defendants account.

Trial in Foreclosure Case No. 88-2643 ensued. RGC and Gervel offered Quas Motion to SO ORDERED.[15]

Dismiss[13] in Collection Case No. 8364 as basis for the foreclosure of Quas pledged

shares. Quas Motion to Dismiss states:

 37

proportionate share, in the same way defendants had collected from the
However, on RGC and Gervels Motion for Reconsideration, RTC-Branch 63 issued its Order of plaintiff, by foreclosing his pledged shares of stock, his proportionate
share, after they had made payments. From all indications, the provisions
of the Indemnity Agreements have remained binding between the
3 May 1996 (3 May 1996 Order) reconsidering and setting aside the 12 January 1996
parties.

Decision. The 3 May 1996 Order states: On the third issue, there is merit to defendants assertion that plaintiff has
benefited from the payments made by defendants. As alleged by
defendants, and this has not been denied by plaintiff, in Civil Case No.
After a thorough review of the records of the case, and an evaluation of 8364 filed before Branch 149 of this Court, where the creditors were
the evidence adduced by the parties as well as their contentions, the enforcing the parties liabilities as sureties, plaintiff succeeded in having
issues to be resolved boil down to the following: the case dismissed by arguing that defendants payments [were] for the
entire obligation, hence, the obligation should be considered fully paid
1. Whether or not the parties obligation to reimburse, under
and extinguished. With the dismissal of the case, the indications are that
the Indemnity Agreements was premised on the payment by
the creditors are no longer running after plaintiff to enforce his liabilities
any of them of the entire obligation;
as surety of Ladtek.
2. Whether or not there is basis to plaintiffs apprehension that
Whether or not the surety agreements signed by the parties and the
he would be made to pay twice for the single obligation; and
creditors were novated is not material in this controversy. The fact is that
3. Whether or not plaintiff was benefited by the payments there was payment of the obligation. Hence, the Indemnity Agreements
made by defendants. govern.

Regarding the first issue, a closer scrutiny of the pertinent provisions of In the final analysis, defendants payments gave rise to plaintiffs
the Indemnity Agreements executed by the parties would not reveal any obligation to reimburse the former. Having failed to do so, upon demand,
significant indication that the parties liabilities are indeed premised on defendants were justified in foreclosing the pledged shares of stocks.
the payment by any of them of the entire obligation. These agreements
clearly provide that the parties obligation to reimburse accrues upon
WHEREFORE, premises considered, the decision dated January 12, 1996 is
mere advice that one of them has paid or will so pay the obligation. It is reconsidered and set aside. The above-entitled complaint against
not specified whether the payment is for the entire obligation or not. defendants is DISMISSED.

Accordingly, the Court stands corrected in this regard. The obvious Likewise, defendants counterclaim is also dismissed.
conclusion that can be seen now is that payment of the entire
obligation is not a condition sine qua non for the paying party to SO ORDERED.[16] (Emphasis supplied)
demand reimbursement. The parties have expressly contracted that each
will reimburse whoever is made to pay the obligation whether entirely or Qua filed a motion for reconsideration of the 3 May 1996 Order which RTC-Branch 63 denied.
just a portion thereof.
Aggrieved, Qua appealed to the Court of Appeals. During the pendency of the appeal, Qua
On the second issue, plaintiffs apprehension that he would be made to filed a Manifestation[17] with the Court of Appeals attaching the Decision[18]of 21 November
pay twice for the single obligation is unfounded. Under the above- 1996 rendered in Collection Case No. 8364. The dispositive portion of the decision reads:
WHEREFORE, premises considered, judgment is hereby rendered
mentioned Indemnity Agreements, in the event that the creditors are
ordering defendants Ladtek, Inc. and Lawrence C. Qua:
able to collect from him, he has the right to ask defendants to pay their
 38

1. To pay, jointly and severally, the plaintiff the amount In the case at bar, Republic Glass and Gervel made partial payments only,
of P44,552,738.34 as of October 31, 1987 plus the stipulated interest of and so they did not extinguish the entire obligation. But Republic Glass
30.73% per annum and penalty charges of 12% per annum from and Gervel nevertheless obtained quitclaims in their favor and so they
November 1, 1987 until the whole amount is fully paid, ceased to be solidarily liable with plaintiff for the balance of the debt
less P7,000,000.00 paid by defendants Republic Glass Corporation and (Exhs. D, E, and I). Plaintiff thus became solely liable for the unpaid
Gervel, Inc., but the liability of defendant Lawrence C. Qua should be portion of the debt even as he is being held liable for reimbursement on
limited only to P5,000,000.00 and P1,200,000.00, the amount stated in the said portion.
the Continuing Suretyship dated June 15, 1983, Exh. D and Continuing
Suretyship dated December 14, 1981, Exh. D-1, respectively, plus the What happened therefore, was that Metrobank and PDCP in effect
stipulated interest and expenses incurred by the plaintiff. enforced the Suretyship Agreements jointly as against plaintiff and
defendants. Consequently, the solidary obligation under the Suretyship
2. To pay, jointly and severally, the plaintiff an amount Agreements was novated by the substantial modification of its principal
equivalent to ten (10%) percent of the total amount due as and by way of conditions. xxx The resulting change was from one with three solidary
attorneys fees; debtors to one in which Lawrence Qua became the sole solidary co-
debtor of Ladtek.
3. To pay the cost of suit.
Defendants cannot simply pay off a portion of the debt and then absolve
The Counterclaims of the defendants Ladtek, Inc. and Lawrence C. Qua against the themselves from any further liability when the obligation has not been
plaintiff are hereby dismissed. totally extinguished.

Likewise, the cross-claims of the defendants are dismissed. In the final reckoning, this Court finds that the foreclosure and sale of the
shares pledged by plaintiff was totally unjustified and without basis
SO ORDERED.[19] (Emphasis supplied) because the obligation secured by the underlying pledge had been
extinguished by novation. xxx[21]

On 6 March 2000, the Court of Appeals rendered the questioned Decision setting aside the 3

May 1996 Order of RTC-Branch 63 and reinstating the 12 January 1996 Decision ordering RGC The Court of Appeals further held that there was an implied novation or substantial

and Gervel to return the foreclosed shares of stock to Qua.[20]

incompatibility in the suretys mode or manner of payment from one for the entire obligation

Hence, this petition. to one merely of proportionate share. The appellate court ruled that RGC and Gervels
The Ruling of the Court of Appeals
payment to the creditors only amounted to their proportionate shares of the obligation,
In reversing the 3 May 1996 Order and reinstating the 12 January 1996 Decision, the
considering the following evidence:
appellate court quoted the RTC-Branch 63s 12 January 1996 Decision:
The letter of the Republic to the appellant, Exhibit G, dated June 25,
1987, which mentioned the letter from PDCP confirming its willingness to
The liability of each party under the indemnity agreements therefore is
release the joint and solidary obligation of the Republic and Gervel
premised on the payment by any of them of the entire
subject to some terms and conditions, one of which is the appellants
obligation. Without such payment, there would be no corresponding
acceptable repayment plan of his pro-rata share; and the letter of PDCP
share to reimburse. Payment of the entire obligation naturally redounds
to the Republic, Exhibit H, mentioning full payment of the pro rata share
to the benefit of the other solidary debtors who must then reimburse the
of the Republic and Gervel, and the need of the appellant to submit an
paying co-debtors to the extent of his corresponding share.
 39

acceptable repayment plan covering his pro-rata share, the release from
solidary liability by PDCP, Exhibit J, mentioning full payment by the
Republic and Gervel of their pro rata share in the loan, as solidary The Courts Ruling
obligors, subject however to the terms and conditions of the hold out We deny the petition.
agreement; and the non-payment in full of the loan, subject of the May
10, 1984 Promissory Note, except the 7 million payment by both Republic
and Gervel, as mentioned in the Decision (Case No. 8364, Metrobank vs. Whether Qua was in estoppel
Ladtek, et al). Precisely, Ladtek and the appellant, in said Decision were
directed to pay Metrobank the balance of P9,560,798, supposedly due
and unpaid.
RGC and Gervel contend that Qua is in estoppel for making conflicting statements in two
different and separate cases. Qua cannot now claim that the payment made to Metrobank
Thus, the payment did not extinguish the entire obligation and did not benefit Qua. was not for the entire obligation because of his Motion to Dismiss Collection Case No. 8364
where he stated that RGC and Gervels payment was for the entireobligation.
Accordingly, RGC and Gervel cannot demand reimbursement. The Court of Appeals also held

that Qua even became solely answerable for the unpaid balance of the obligations by virtue The essential elements of estoppel in pais are considered in relation to the party to be

of the quitclaims executed by Metrobank and PDCP in favor of RGC and Gervel. RGC and estopped, and to the party invoking the estoppel in his favor. On the party to be estopped,

Gervel ceased to be solidarily liable for Ladteks loan obligations.[22] such party (1) commits conduct amounting to false representation or concealment of

material facts or at least calculated to convey the impression that the facts are inconsistent
The Issues

with those which the party subsequently attempts to assert; (2) has the intent, or at least
RGC and Gervel raise the following issues for resolution:
expectation that his conduct shall at least influence the other party; and (3) has knowledge,

I.
actual or constructive, of the real facts. On the party claiming the estoppel, such party (1)
WHETHER THE PRINCIPLE OF ESTOPPEL APPLIES TO QUAS JUDICIAL
STATEMENTS THAT RGC AND GERVEL PAID THE ENTIRE OBLIGATION. has lack of knowledge and of the means of knowledge of the truth on the facts in question;

II.
WHETHER PAYMENT OF THE ENTIRE OBLIGATION IS A CONDITION SINE (2) has relied, in good faith, on the conduct or statements of the party to be estopped; (3)
QUA NON FOR RGC AND GERVEL TO DEMAND REIMBURSEMENT FROM
QUA UNDER THE INDEMNITY AGREEMENTS EXECUTED BY THEM AFTER has acted or refrained from acting based on such conduct or statements as to change the
RGC AND GERVEL PAID METROBANK UNDER THE SURETY AGREEMENT.

III. position or status of the party claiming the estoppel, to his injury, detriment or prejudice.[24]
ASSUMING ARGUENDO THAT THERE WAS NOVATION OF THE SURETY
AGREEMENTS SIGNED BY THE PARTIES AND THE CREDITORS, WHETHER
THE NOVATION IS MATERIAL IN THIS CASE.[23] In this case, the essential elements of estoppel are inexistent.
 40

While Quas statements in Collection Case No. 8364 conflict with his statements in made in the same case in which it is offered. If made in another case or in another court, the
Foreclosure Case No. 88-2643, RGC and Gervel miserably failed to show that Qua, in making fact of such admission must be proved as in the case of any other fact, although if made in a
those statements, intended to falsely represent or conceal the material facts. Both parties judicial proceeding it is entitled to greater weight.[28]
undeniably know the real facts.

RGC and Gervel introduced Quas Motion to Dismiss and the Order dismissing Collection Case
Nothing in the records shows that RGC and Gervel relied on Quas statements in Collection
No. 8364 to prove Quas claim that the payment was for the entire obligation. Qua does not
Case No. 8364 such that they changed their position or status, to their injury, detriment or
deny making such statement but explained that he honestly believed and pleaded in the
prejudice. RGC and Gervel repeatedly point out that it was the presiding judge[25] in
lower court and in CA-G.R. CV No. 58550 that the entire debt was fully extinguished when
Collection Case No. 8364 who relied on Quas statements in Collection Case No. 8364. RGC
the petitioners paid P7 million to Metrobank.[29]
and Gervel claim that Qua deliberately led the Presiding Judge to believe that their payment

We find Quas explanation substantiated by the evidence on record. As stated in the

to Metrobank was for the entire obligation. As a result, the presiding judge ordered the

Agreements, Ladteks original loan from Metrobank was only P6.2 million. Therefore, Qua
dismissal of Collection Case No. 8364 against Qua.[26]

reasonably believed that RGC and Gervels P7 million payment to Metrobank pertained to the
RGC and Gervel further invoke Section 4 of Rule 129 of the Rules of Court to support their
entire obligation. However, subsequent facts indisputably show that RGC and Gervels
stance:
payment was not for the entire obligation. RTC-Branch 149 reinstated Collection Case No.
Sec. 4. Judicial admissions. An admission, verbal or written, made by a
party in the course of the proceedings in the same case, does not require
proof. The admission may be contradicted only by showing that it was 8364 against Qua and ruled in Metrobanks favor, ordering Qua to pay P6.2 million.
made through palpable mistake or that no such admission was made.

Whether payment of the entire obligation is an

A party may make judicial admissions in (a) the pleadings filed by the parties, (b) during the essential condition for reimbursement

trial either by verbal or written manifestations or stipulations, or (c) in other stages of the
RGC and Gervel assail the Court of Appeals ruling that the parties liabilities under the
judicial proceeding.[27]
Agreements depend on the full payment of the obligation. RGC and Gervel insist that it is not
The elements of judicial admissions are absent in this case. Qua made conflicting statements
in Collection Case No. 8364 and in Foreclosure Case No. 88-2643, and not in the same case as an essential condition that the entire obligation must first be paid before they can seek
required in Section 4 of Rule 129. To constitute judicial admission, the admission must be
 41

reimbursement from Qua. RGC and Gervel contend that Qua should pay 42.22% of any liability of RGC, Gervel and Qua became absolute simultaneously when Ladtek defaulted in

amount which they paid or would pay Metrobank and PDCP. its loan payment. As a result, RGC, Gervel and Qua all became directly liable at the same time

RGC and Gervels contention is partly meritorious. to Metrobank and PDCP. Thus, RGC and Gervel cannot automatically claim for indemnity

from Qua because Qua himself is liable directly to Metrobank and PDCP.

Payment of the entire obligation by one or some of the solidary debtors results in a
If we allow RGC and Gervel to collect from Qua his proportionate share, then Qua would pay
corresponding obligation of the other debtors to reimburse the paying debtor.[30]However,
much more than his stipulated liability under the Agreements. In addition to the P3,860,646
we agree with RGC and Gervels contention that in this case payment of the entire obligation
claimed by RGC and Gervel, Qua would have to pay his liability of P6.2 million to Metrobank
is not an essential condition before they can seek reimbursement from Qua. The words of
and more than P1 million to PDCP. Since Qua would surely exceed his proportionate share,
the Agreements are clear.
he would then recover from RGC and Gervel the excess payment. This situation is absurd and

circuitous.
RGC, GERVEL and QUA each covenant that each will respectively
reimburse the party made to pay the Lenders to the extent and subject to
the limitations set forth herein, all sums of money which the party made Contrary to RGC and Gervels claim, payment of any amount will not automatically result in
to pay the Lenders shall pay or become liable to pay by reason of any of
the foregoing, and will make such payments within five (5) days from the reimbursement. If a solidary debtor pays the obligation in part, he can recover
date that the party made to pay the Lenders gives written notice to the
parties hereto that it shall have become liable therefor and has advised reimbursement from the co-debtors only in so far as his payment exceeded his share in the
the Lenders of its willingness to pay whether or not it shall have already
paid out such sum or any part thereof to the Lenders or to the persons obligation.[33] This is precisely because if a solidary debtor pays an amount equal to his
entitled thereto. (Emphasis supplied)
proportionate share in the obligation, then he in effect pays only what is due from him. If the
The Agreements are contracts of indemnity not only against actual loss but against liability as
debtor pays less than his share in the obligation, he cannot demand reimbursement because
well. In Associated Insurance & Surety Co., Inc. v. Chua,[31] we distinguished between a
his payment is less than his actual debt.
contract of indemnity against loss and a contract of indemnity against liability, thus:[32]
To determine whether RGC and Gervel have a right to reimbursement, it is indispensable to
The agreement here sued upon is not only one of indemnity against loss
but of indemnity against liability. While the first does not render the ascertain the total obligation of the parties. At this point, it becomes necessary to consider
indemnitor liable until the person to be indemnified makes payment or
sustains loss, the second becomes operative as soon as the liability of the decision in Collection Case No. 8364 on the parties obligation to Metrobank. To repeat,
the person indemnified arises irrespective of whether or not he has Metrobank filed Collection Case No. 8364 against Ladtek, RGC, Gervel and Qua to collect
suffered actual loss.(Emphasis supplied)
Ladteks unpaid loan.

Therefore, whether the solidary debtor has paid the creditor, the other solidary debtors

should indemnify the former once his liability becomes absolute. However, in this case, the
 42

RGC and Gervel assail the Court of Appeals consideration of the decision in Collection Case
Ladteks foreign currency loan.[39] Moreover, PDCP filed a collection case against Qua alone,
No. 8364[34] because Qua did not offer the decision in evidence during the trial in Foreclosure

Case No. 88-2643 subject of this petition. RTC-Branch 62[35] rendered the decision in docketed as Civil Case No. 2259, in the Regional Trial Court of Makati, Branch 150.[40]

Collection Case No. 8364 on 21 November 1996 while Qua filed his Notice of Appeal of the 3

May 1996 Order on 19 June 1996. Qua could not have possibly offered in evidence the Since they only made partial payments, RGC and Gervel should clearly and convincingly show

decision in Collection Case No. 8364 because RTC-Branch 62 rendered the decision only after that their payments to Metrobank and PDCP exceeded their proportionate shares in the

Qua elevated the present case to the Court of Appeals. Hence, Qua submitted the decision in obligations before they can seek reimbursement from Qua. This RGC and Gervel failed to

Collection Case No. 8364 during the pendency of the appeal of Foreclosure Case No. 88-2643 do. RGC and Gervel, in fact, never claimed that their payments exceeded their shares in the

in the Court of Appeals. obligations. Consequently, RGC and Gervel cannot validly seek reimbursement from Qua.

As found by RTC-Branch 62, RGC, Gervel and Quas total obligation was P14,200,854.37 as of
Whether there was novation of the Agreements
31 October 1987.[36] During the pendency of Collection Case No. 8364, RGC and Gervel paid
RGC and Gervel contend that there was no novation of the Agreements. RGC and Gervel
Metrobank P7 million. Because of the payment, Metrobank executed a quitclaim [37] in favor
further contend that any novation of the Agreements is immaterial to this case. RGC and
of RGC and Gervel. By virtue of Metrobanks quitclaim, RTC-Branch 62 dismissed Collection Gervel disagreed with the Court of Appeals on the effect of the implied novation which
supposedly transpired in this case. The Court of Appeals found that there was an implied
Case No. 8364 against RGC and Gervel, leaving Ladtek and Qua as defendants. Considering
novation or substantial incompatibility in the mode or manner of payment by the surety
that RGC and Gervel paid only P7 million out of the total obligation of P14,200,854.37, which from the entire obligation, to one merely of proportionate share. RGC and Gervel claim
that if it is true that an implied novation occurred, then the effect would be to release
payment was less than RGC and Gervels combined shares in the obligation,[38] it was clearly respondent (Qua) as the entire obligation is considered extinguished by operation of
partial payment. Moreover, if it were full payment, then the obligation would have been law. Thus, Qua should now reimburse RGC and Gervel his proportionate share under the
surety agreements.
extinguished. Metrobank would have also released Qua from his obligation.
Novation extinguishes an obligation by (1) changing its object or principal conditions; (2)
substituting the person of the debtor; and (3) subrogating a third person in the rights of the
RGC and Gervel also made partial payment to PDCP. Proof of this is the Release from Solidary creditor. Article 1292 of the Civil Code clearly provides that in order that an obligation may
be extinguished by another which substitutes the same, it should be declared in unequivocal
Liability that PDCP executed in RGC and Gervels favor which stated that their payment terms, or that the old and new obligations be on every point incompatible with each
other.[41] Novation may either be extinctive or modificatory.Novation is extinctive when an
old obligation is terminated by the creation of a new obligation that takes the place of the
of P1,730,543.55 served as full payment of their corresponding proportionate share in
former. Novation is merely modificatory when the old obligation subsists to the extent it
remains compatible with the amendatory agreement.[42]
 43

We find that there was no novation of the Agreements. The parties did not constitute a new  Qua filed a complaint for injunction with damages with application for TRO
obligation to substitute the Agreements. The terms and conditions of the Agreements remain
the same. There was also no showing of complete incompatibility in the manner of payment Issues
of the parties obligations. Contrary to the Court of Appeals ruling, the mode or manner of
 W/N payment of the entire obligation is an essential condition for reimbursement?
payment by the parties did not change from one for the entire obligation to one merely of
proportionate share. The creditors, namely Metrobank and PDCP, merely proceeded against  W/N there was novation of agreements as held by CA (that there was implied novation)
RGC and Gervel for their proportionate shares only.[43] This preference is within the creditors
discretion which did not necessarily affect the nature of the obligations as well as the terms Ruling
and conditions of the Agreements. A creditor may choose to proceed only against some and
not all of the solidary debtors. The creditor may also choose to collect part of the debt from On the first issue:
some of the solidary debtors, and the remaining debt from the other solidary debtors.
 Contrary to RGC and GC’s claim, payment of any amount will not automatically result in
reimbursement. If a solidary debtor pays the obligation in part, he can recover
In sum, RGC and Gervel have no legal basis to seek reimbursement from Qua. Consequently,
reimbursement from the co-debtors only in so far his payment exceeded his share in the
RGC and Gervel cannot validly foreclose the pledge of Quas GMC shares of stock which obligation. This is precisely because if solidary debtor pays an amount equal to his
secured his obligation to reimburse.[44] Therefore, the foreclosure of the pledged shares of proportionate share in the obligation, then he in effects pay only what is due to him. If the
stock has no leg to stand on. debtor pays less than his share in the obligation, he cannot demand reimbursement because
his payment is less than his actual debt.

WHEREFORE, we DENY the petition. The Decision dated 6 March 2000 of the Court of  Since they only made partial payments, RGC and GC should clearly and convincingly show
that their payments to Metro bank and PDCP exceeded their proportionate shares in the
Appeals in CA-G.R. CV No. 54737 is AFFIRMED. Costs against petitioners. obligations before they can seek reimbursement from Qua. RGC and GC failed to do this, thus
they cannot seek reimbursement from Qua
SO ORDERED.
On the second issue:
Facts
 There was no novation of the agreements. The parties did not constitute new obligations to
 Republic Glass, Gervel and Qua were shareholders of Ladtek substitute the agreements. The terms and conditions of the agreement remains the same.

 Ladtek obtained loans from Metrobank and Private Dev’t Corp of the Phils (PDCP)  Novation extinguishes obligation by 1) changing the object or principal conditions; 2)
substituting the person of the debtor and 3) subrogating a third person in the rights of the
 They entered into agreement that in case of default in payment of Ladtek loans, the parties creditor
will reimburse each other the proportionate shares of any sum that any might pay to
creditors

 Ladtek defaulted on its obligation to Metrobank and PDCP

 Republic Glass Corp and Gervel Corp payed Metrobank 7M (not full payment of the amount
due)

 Republic Glass and Gervel demanded to Qua reimbursement of the total amount that RGC
and GC paid to Metrobank

 Qua refused to pay

 44

SECOND DIVISION Refractory Sliding Nozzle Bricks for which there is now due the sum of (P 278,
917.80; P 419,719.20; P 387, 551. 95; andP389, 085.14 respectively) under the
[G.R. No. 110844. April 27, 2000] terms of which the accused agreed to sell the same for cash with the express
obligation to remit to the complainant bank the proceeds of the sale and/or to turn
over the goods, if not sold, on demand, but the accused, once in possession of said
ALFREDO CHING, petitioner, vs. HON. COURT OF APPEALS, HON. ZOSIMO Z. ANGELES, RTC -
goods, far from complying with his obligation and with grave abuse of confidence,
BR. 58, MAKATI, METRO MANILA, PEOPLE OF THE PHILIPPINES AND ALLIED BANKING
did then and there, willfully, unlawfully and feloniously misappropriate, misapply
CORPORATION, respondents.
and convert to his own personal use and benefit the said goods and/or the
proceeds of the sale thereof, and despite repeated demands, failed and refused
DECISION and still fails and refuses, to account for and/or remit the proceeds of sale thereof
to the Allied Banking Corporation to the damage and prejudice of the said
BUENA, J.: complainant bank in the aforementioned amount of
( P 278,917.80; P 419,719.20; P 387,551.95; and P389,085.14)." x-sc
Confronting the Court in this instant petition for review on certiorari under Rule 45 is the task
of resolving the issue of whether the pendency of a civil action for damages and declaration On 10 February 1992, an "Omnibus Motion[5] to Strike Out Information, or in the Alternative
of nullity of documents, specifically trust receipts, warrants the suspension of criminal to Require Public Prosecutor to Conduct Preliminary Investigation, and to Suspend in the
proceedings instituted for violation of Article 315 1(b) of the Revised Penal Code, in relation Meantime Further Proceedings in these Cases," was filed by the petitioner.
to P.D. 115, otherwise known as the "Trust Receipts Law".xl-aw
In an order dated 13 February 1992, the Regional Trial Court of Makati, Branch 58, acting on
Petitioner Alfredo Ching challenges before us the decision[1] of the Court of Appeals the omnibus motion, required the prosecutors office to conduct a preliminary investigation
promulgated on 27 January 1993 in CA G.R. SP No. 28912, dismissing his "Petition and suspended further proceedings in the criminal cases.
for Certiorari and Prohibition with Prayer for Issuance of Temporary Restraining Order/
Preliminary Injunction", on the ground of lack of merit. On 05 March 1992, petitioner Ching, together with Philippine Blooming Mills Co. Inc., filed a
case[6] before the Regional Trial Court of Manila (RTC-Manila), Branch 53, for declaration of
Assailed similarly is the resolution[2] of the Court of Appeals dated 28 June 1993 denying nullity of documents and for damages docketed as Civil Case No. 92-60600, entitled
petitioners motion for reconsideration. "Philippine Blooming Mills, Inc. et. al. vs. Allied Banking Corporation."

As borne by the records, the controversy arose from the following facts: On 07 August 1992, Ching filed a petition[7] before the RTC-Makati, Branch 58, for the
suspension of the criminal proceedings on the ground of prejudicial question in a civil action.
On 04 February 1992,[3] petitioner was charged before the Regional Trial Court of Makati
(RTC- Makati), Branch 58, with four counts of estafa punishable under Article 315 par. 1(b) of The prosecution then filed an opposition to the petition for suspension, against which
the Revised Penal Code, in relation to Presidential Decree 115, otherwise known as the opposition, herein petitioner filed a reply.[8]
"Trust Receipts Law".
On 26 August 1992, the RTC-Makati issued an order[9] which denied the petition for
The four separate informations[4]
which were couched in similar language except for the suspension and scheduled the arraignment and pre-trial of the criminal cases. As a result,
date, subject goods and amount thereof, charged herein petitioner in this wise: petitioner moved to reconsider[10] the order to which the prosecution filed an opposition.

"That on or about the (18th day of May 1981; 3rd day of June 1981; 24th day of In an order[11] dated 04 September 1992, the RTC-Makati, before which the criminal cases are
June 1981 and 24th day of June 1981), in the Municipality of Makati, Metro Manila, pending, denied petitioner's motion for reconsideration and set the criminal cases for
Philippines and within the jurisdiction of this Honorable Court, the above-named arraignment and pre-trial.
accused having executed a trust receipt agreement in favor of Allied Banking
Corporation in consideration of the receipt by the said accused of goods described Aggrieved by these orders[12] of the lower court in the criminal cases, petitioner brought
as 12 Containers (200 M/T) Magtar Brand Dolomites; 18 Containers (Zoom M/T) before the Court of Appeals a petition for certiorari and prohibition which sought to declare
Magtar Brand Dolomites; High Fired Refractory Sliding Nozzle Bricks; and High Fired
 45

the nullity of the aforementioned orders and to prohibit the RTC-Makati from conducting The instant petition is bereft of merit.
further proceedings in the criminal cases.
We agree with the findings of the trial court, as affirmed by the Court of Appeals, that no
In denying the petition,[13] the Court of Appeals, in CA G.R. SP No. 28912, ruled: prejudicial question exists in the present case. Scmis

"X X X Civil Case No. 90-60600 pending before the Manila Regional Trial Court As defined, a prejudicial question is one that arises in a case the resolution of which is a
seeking(sic) the declaration of nullity of the trust receipts in question is not a logical antecedent of the issue involved therein, and the cognizance of which pertains to
prejudicial question to Criminal Case Nos. 92-0934 to 37 pending before the another tribunal. The prejudicial question must be determinative of the case before the court
respondent court charging the petitioner with four counts of violation of Article but the jurisdiction to try and resolve the question must be lodged in another court or
315, par. 1(b), RPC, in relation to PD 115 as to warrant the suspension of the tribunal.[18]
proceedings in the latter X X X." Sc
It is a question based on a fact distinct and separate from the crime but so intimately
Consequently, petitioner filed a motion for reconsideration of the decision which the connected with it that it determines the guilt or innocence of the accused, and for it to
appellate court denied for lack of merit, via a resolution[14] dated 28 June 1993. 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
Notwithstanding the decision rendered by the Court of Appeals, the RTC-Manila, Branch 53 resolution of the issue or issues raised in the civil case, the guilt or innocence of the accused
in an order dated 19 November 1993 in Civil Case No. 92-60600, admitted petitioners would necessarily be determined.[19] It comes into play generally in a situation where a civil
amended complaint[15] which, inter alia, prayed the court for a judgment: 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
"1. Declaring the Trust Receipts, annexes D, F, H and J hereof, null and void, or
guilt or innocence of the accused in the criminal case. [20]
otherwise annulling the same, for failure to express the true intent and agreement
of the parties;
More simply, for the court to appreciate the pendency of a prejudicial question, the law,[21] in
no uncertain terms, requires the concurrence of two essential requisites, to wit:
"2. Declaring the transaction subject hereof as one of pure and simple loan
without any trust receipt agreement and/or not one involving a trust receipt, and
accordingly declaring all the documents annexed hereto as mere loan documents a) The civil action involves an issue similar or intimately related to the issue raised
XXX"(emphasis ours) in the criminal action; and

In its amended answer,[16] herein private respondent Allied Banking Corporation submitted in b) The resolution of such issue determines whether or not the criminal action may
riposte that the transaction applied for was a "letter of credit/trust receipt accommodation" proceed.
and not a "pure and simple loan with the trust receipts as mere additional or side
documents", as asserted by herein petitioner in its amended complaint.[17] Verily, under the prevailing circumstances, the alleged prejudicial question in the civil case
for declaration of nullity of documents and for damages, does not juris et de jure determine
Through the expediency of Rule 45, petitioner seeks the intervention of this Court and prays: the guilt or innocence of the accused in the criminal action for estafa. Assuming arguendo
that the court hearing the civil aspect of the case adjudicates that the transaction entered
into between the parties was not a trust receipt agreement, nonetheless the guilt of the
"After due consideration, to render judgment reversing the decision and resolution,
accused could still be established and his culpability under penal laws determined by other
Annexes A and B hereof, respectively, and ordering the suspension of Criminal
evidence. To put it differently, even on the assumption that the documents are declared null,
Cases (sic) Nos. 92-0934 to 92-0937, inclusive, entitled "People of the Philippines
it does not ipso facto follow that such declaration of nullity shall exonerate the accused from
vs. Alfredo Ching" pending before Branch 58 of the Regional Trial Court of Makati,
criminal prosecution and liability.
Metro Manila, until final determination of Civil Case No. 92-600 entitled Philippine
Blooming Mills Co. Inc. and Alfredo Ching vs. Allied Banking Corporation" pending
before Branch 53 of the Regional Trial Court of Manila." Accordingly, the prosecution may adduce evidence to prove the criminal liability of the
accused for estafa, specifically under Article 315 1(b) of the Revised Penal Code which
explicitly provides that said crime is committed: Missc
 46

"X X X (b) By misappropriating or converting, to the prejudice of another, Before arraignment, the accused filed a civil case contesting the validity of a certain receipt
money, goods, or any other personal property received by the offender in signed by them. In the receipt, the accused acknowledged having received the aforesaid sum,
trust or on commission, or for administration, or any other obligation in addition to the amount of P240.00 as agents commission. The complaint, however, alleged
involving the duty to make delivery of or to return the same, even though that the accused never received any amount from Jimenez and that the signatures on the
such obligation be totally or partially guaranteed by a bond; or by questioned receipt were secured by means of fraud, deceit and intimidation.
denying having received such money, goods, or other property."
In ruling out the existence of prejudicial question, we declared:
Applying the foregoing principles, the criminal liability of the accused for violation of Article
315 1(b) of the Revised Penal Code, may still be shown through the presentation of evidence "X X X It will be readily seen that the alleged prejudicial question is not
to the effect that: (a) the accused received the subject goods in trust or under the obligation determinative of the guilt or innocence of the parties charged with estafa, because
to sell the same and to remit the proceeds thereof to Allied Banking Corporation, or to return even on the assumption that the execution of the receipt whose annulment they
the goods, if not sold; (b) that accused Ching misappropriated or converted the goods and/or sought in the civil case was vitiated by fraud, duress or intimidation, their guilt
the proceeds of the sale; (c) that accused Ching performed such acts with abuse of could still be established by other evidence showing, to the degree required by law,
confidence to the damage and prejudice of Allied Banking Corporation; and (d) that demand that they had actually received from the complainant the sum of P20,000.00 with
was made by the bank to herein petitioner. which to buy for him a fishing boat, and that, instead of doing so, they
misappropriated the money and refused or otherwise failed to return it to him
Presidential Decree 115, otherwise known as the "Trust Receipts Law", specifically Section 13 upon demand. X X X "Spped
thereof, provides:
Furthermore, petitioner submits that the truth or falsity of the parties respective claims as
"The failure of an entrustee to turn over the proceeds of the sale of the goods, regards the true nature of the transactions and of the documents, shall have to be first
documents or instruments covered by a trust receipt to the extent of the amount determined by the Regional Trial Court of Manila, which is the court hearing the civil case.
owing to the entruster or as appears in the trust receipt or to return said goods,
documents or instruments if they were not sold or disposed of in accordance with While this may be true, it is no less true that the Supreme Court may, on certain exceptional
the terms of the trust receipt shall constitute the crime of estafa, punishable under instances, resolve the merits of a case on the basis of the records and other evidence before
the provisions of Article Three hundred fifteen, paragraph one (b) of Act Numbered it, most especially when the resolution of these issues would best serve the ends of justice
Three thousand eight hundred and fifteen, as amended, otherwise known as the and promote the speedy disposition of cases.
Revised Penal Code."
Thus, considering the peculiar circumstances attendant in the instant case, this Court sees
We must stress though, that an act violative of a trust receipt agreement is only one mode of the cogency to exercise its plenary power:
committing estafa under the abovementioned provision of the Revised Penal Code. Stated
differently, a violation of a trust receipt arrangement is not the sole basis for incurring
"It is a rule of procedure for the Supreme Court to strive to settle the entire
liability under Article 315 1(b) of the Code.
controversy in a single proceeding leaving no root or branch to bear the seeds of
future litigation. No useful purpose will be served if a case or the determination of
In Jimenez vs. Averia,[22] where the accused was likewise charged with estafa, this Court had an issue in a case is remanded to the trial court only to have its decision raised
occasion to rule that a civil case contesting the validity of a certain receipt is not a prejudicial again to the Court of Appeals and from there to the Supreme Court (citing Board of
question that would warrant the suspension of criminal proceedings for estafa. Commissioners vs. Judge Joselito de la Rosa and Judge Capulong, G.R. Nos. 95122-
23).
In the abovementioned case, a criminal charge for estafa was filed in the Court of First
Instance of Cavite against the two accused. The information alleged that the accused, having "We have laid down the rule that the remand of the case or of an issue to the lower
received the amount of P20,000.00 from Manuel Jimenez for the purchase of a fishing boat, court for further reception of evidence is not necessary where the Court is in
with the obligation on the part of the former to return the money in case the boat was not position to resolve the dispute based on the records before it and particularly
purchased, misappropriated the said amount to the damage and prejudice of where the ends of justice would not be subserved by the remand thereof (Escudero
Jimenez.[23] Misspped vs. Dulay, 158 SCRA 69). Moreover, the Supreme Court is clothed with ample
 47

authority to review matters, even those not raised on appeal if it finds that their agreement to pay all or part of the proceeds of the sale to the lender.[28] It is a security
consideration is necessary in arriving at a just disposition of the case."[24] agreement pursuant to which a bank acquires a "security interest" in the goods. It secures an
indebtedness and there can be no such thing as security interest that secures no
On many occasions, the Court, in the public interest and for the expeditious administration of obligation.[29]
justice, has resolved actions on the merits instead of remanding them to the trial court for
further proceedings, such as where the ends of justice would not be subserved by the Clearly, a trust receipt partakes the nature of a security transaction. It could never be a mere
remand of the case.[25] additional or side document as alleged by petitioner. Otherwise, a party to a trust receipt
agreement could easily renege on its obligations thereunder, thus undermining the
Inexorably, the records would show that petitioner signed and executed an application and importance and defeating with impunity the purpose of such an indispensable tool in
agreement for a commercial letter of credit to finance the purchase of imported goods. commercial transactions. Spp-edjo
Likewise, it is undisputed that petitioner signed and executed trust receipt documents in
favor of private respondent Allied Banking Corporation. Josp-ped Of equal importance is the fact that in his complaint in Civil Case No. 92-60600, dated 05
March 1992, petitioner alleged that the trust receipts were executed and intended as
In its amended complaint, however, which notably was filed only after the Court of Appeals collateral or security. Pursuant to the rules, such particular allegation in the complaint is
rendered its assailed decision, petitioner urges that the transaction entered into between the tantamount to a judicial admission on the part of petitioner Ching to which he must be
parties was one of "pure loan without any trust receipt agreement". According to petitioner, bound.
the trust receipt documents were intended merely as "additional or side documents covering
the said loan" contrary to petitioners allegation in his original complaint that the trust Thus, the Court of Appeals in its resolution dated 28 June 1993, correctly observed:
receipts were executed as collateral or security.
"It was petitioner himself who acknowledged the trust receipts as mere collateral
We do not agree. As Mr. Justice Story succinctly puts it: "Naked statements must be entitled and security for the payment of the loan but kept on insisting that the real and true
to little weight when the parties hold better evidence behind the scenes." [26] transaction was one of pure loan. X X X"

Hence, with affirmance, we quote the findings of the Court of Appeals: "In his present motion, the petitioner alleges that the trust receipts are evidence of
a pure loan or that the same were additional or side documents that actually stood
"The concept in which petitioner signed the trust receipts, that is whether he as promissory notes and not a collateral or security agreement. He cannot assume
signed the trust receipts as such trust receipts or as a mere evidence of a pure and a position inconsistent with his previous allegations in his civil complaint that the
simple loan transaction is not decisive because precisely, a trust receipt is a security trust receipts were intended as mere collateral or security X X X."
agreement of an indebtedness."
Perhaps, realizing such flaw, petitioner, in a complete turn around, filed a motion
Contrary to petitioners assertions and in view of jurisprudence established in this jurisdiction, to admit amended complaint before the RTC-Manila. Among others, the amended
a trust receipt is not merely an additional or side document to a principal contract, which in complaint alleged that the trust receipts stood as additional or side documents, the
the instant case is alleged by petitioner to be a pure and simple loan. real transaction between the parties being that of a pure loan without any trust
receipt agreement.
As elucidated in Samo vs. People,[27] a trust receipt is considered a security transaction
intended to aid in financing importers and retail dealers who do not have sufficient funds or In an order dated 19 November 1993, the RTC-Manila, Branch 53, admitted the amended
resources to finance the importation or purchase of merchandise, and who may not be able complaint. Accordingly, with the lower courts admission of the amended complaint, the
to acquire credit except through utilization, as collateral, of the merchandise imported or judicial admission made in the original complaint was, in effect, superseded. Mi-so
purchased.
Under the Rules, pleadings superseded or amended disappear from the record, lose their
Further, a trust receipt is a document in which is expressed a security transaction status as pleadings and cease to be judicial admissions. While they may nonetheless be
whereunder the lender, having no prior title in the goods on which the lien is to be given and utilized against the pleader as extrajudicial admissions, they must, in order to have such
not having possession which remains in the borrower, lends his money to the borrower on effect, be formally offered in evidence. If not offered in evidence, the admission contained
security of the goods which the borrower is privileged to sell clear of the lien with an therein will not be considered.[30]
 48

Consequently, the original complaint, having been amended, lost its character as a judicial These circumstances, taken as a whole, lead this Court to doubt the genuine purpose of
admission, which would have required no proof, and became merely an extrajudicial petitioner in filing the amended complaint. Again, we view petitioners actuations with
admission, the admissibility of which, as evidence, required its formal offer.[31] abhorrence and displeasure. Man-ikx

In virtue thereof, the amended complaint takes the place of the original. The latter is Moreover, petitioner contends that the transaction between Philippine Blooming Mills (PBM)
regarded as abandoned and ceases to perform any further function as a pleading. The and private respondent Allied Banking Corporation does not fall under the category of a trust
original complaint no longer forms part of the record.[32] receipt arrangement claiming that the goods were not to be sold but were to be used,
consumed and destroyed by the importer PBM.
Thus, in the instant case, the original complaint is deemed superseded by the amended
complaint. Corollarily, the judicial admissions in the original complaint are considered To our mind, petitioners contention is a stealthy attempt to circumvent the principle
abandoned. Nonetheless, we must stress that the actuations of petitioner, as sanctioned by enunciated in the case of Allied Banking Corporation vs. Ordonez,[37] thus:
the RTC-Manila, Branch 53 through its order admitting the amended complaint, demands
stern rebuke from this Court. "X X X In an attempt to escape criminal liability, private respondent claims P.D. 115
covers goods which are ultimately destined for sale and not goods for use in
Certainly, this Court is not unwary of the tactics employed by the petitioner specifically in manufacture. But the wording of Section 13 covers failure to turn over the
filing the amended complaint only after the promulgation of the assailed decision of the proceeds of the sale of the entrusted goods, or to return said goods if unsold or
Court of Appeals. It bears noting that a lapse of almost eighteen months (from March 1992 to disposed of in accordance with the terms of the trust receipts. Private respondent
September 1993), from the filing of the original complaint to the filing of the amended claims that at the time of PBMs application for the issuance of the LCs, it was not
complaint, is too lengthy a time sufficient to enkindle suspicion and enflame doubts as to the represented to the petitioner that the items were intended for sale, hence, there
true intentions of petitioner regarding the early disposition of the pending cases. Ne-xold was no deceit resulting in a violation of the trust receipts which would constitute a
criminal liability. Again we cannot uphold this contention. The non-payment of the
Although the granting of leave to file amended pleadings is a matter peculiarly within the amount covered by a trust receipt is an act violative of the entrustees obligation to
sound discretion of the trial court and such discretion would not normally be disturbed on pay. There is no reason why the law should not apply to all transactions covered by
appeal, it is also well to mention that this rule is relaxed when evident abuse thereof is trust receipts, except those expressly excluded (68 Am. Jur. 125).
apparent.[33]
"The Court takes judicial notice of customary banking and business practices where
Hence, in certain instances we ruled that amendments are not proper and should be denied trust receipts are used for importation of heavy equipment, machineries and
when delay would arise,[34] or when the amendments would result in a change of cause of supplies used in manufacturing operations. We are perplexed by the statements in
action or defense or change the theory of the case,[35] or would be inconsistent with the the assailed DOJ resolution that the goods subject of the instant case are outside
allegations in the original complaint.[36] the ambit of the provisions of PD 115 albeit covered by trust receipt agreements (
17 February 1988 resolution) and that not all transactions covered by trust receipts
may be considered as trust receipt transactions defined and penalized under P.D.
Applying the foregoing rules, petitioner, by filing the amended complaint, in effect, altered
115 (11 January 1988 resolution). A construction should be avoided when it affords
the theory of his case. Likewise, the allegations embodied in the amended complaint are
an opportunity to defeat compliance with the terms of a statute. Manik-s
inconsistent with that of the original complaint inasmuch as in the latter, petitioner alleged
that the trust receipts were intended as mere collateral or security, the principal transaction
being one of pure loan. "The penal provision of P.D. 115 encompasses any act violative of an obligation
covered by the trust receipt; it is not limited to transactions in goods which are to
be sold (retailed), reshipped, stored or processed as a component of a product
Yet, in the amended complaint, petitioner argued that the said trust receipts were executed
ultimately sold."
as additional or side documents, the transaction being strictly one of pure loan without any
trust receipt arrangement. Obviously these allegations are in discord in relation to each
other and therefore cannot stand in harmony. An examination of P.D. 115 shows the growing importance of trust receipts in Philippine
business, the need to provide for the rights and obligations of parties to a trust receipt
transaction, the study of the problems involved and the action by monetary authorities, and
the necessity of regulating the enforcement of rights arising from default or violations of
 49

trust receipt agreements. The legislative intent to meet a pressing need is clearly Same; Same; Same; Declaration of Nullity of Documents; Estafa; Trust Receipts; A civil action
expressed.[38] for declaration of nullity of documents and for damages does not constitute a prejudicial
question to a criminal case for estafa where the alleged prejudicial question in the civil case
In fine, we reiterate that the civil action for declaration of nullity of documents and for does not juris et de jure determine the guilt or innocence of the accused in the criminal action.
damages does not constitute a prejudicial question to the criminal cases for estafa filed
against petitioner Ching. —Under the prevailing circumstances, the alleged prejudicial question in the civil case for
declaration of nullity of documents and for damages, does not juris et de jure determine the
WHEREFORE, premises considered, the assailed decision and resolution of the Court of guilt or innocence of the accused in the criminal action for estafa. Assuming arguendo that
Appeals are hereby AFFIRMED and the instant petition is DISMISSED for lack of merit.
the court hearing the civil aspect of the case adjudicates that the transaction entered into
Accordingly, the Regional Trial Court of Makati, Branch 58, is hereby directed to proceed with
between the parties was not a trust receipt agreement, nonetheless the guilt of the accused
the hearing and trial on the merits of Criminal Case Nos. 92-0934 to 92-0937, inclusive, and
to expedite proceedings therein, without prejudice to the right of the accused to due could still be established and his culpability under penal laws determined by other evidence.
process. To put it differently, even on the assumption that the documents are declared null, it does
not ipso facto follow that such declaration of nullity shall exonerate the accused from
SO ORDERED. Man-ikan criminal prosecution and liability. Accordingly, the prosecution may adduce evidence to
prove the criminal liability of the accused for estafa, specifically under Article315 Kb) of the
Actions; Criminal Procedure; Prejudicial Question; Words and Phrases; A prejudicial question Revised Penal Code.
is 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. Criminal Law; Trust Receipts Law; Estafa; An act violative of a trust receipt agreement is only
one mode of committing estafa—a violation of a trust receipt arrangement is not the sole
—A prejudicial question is one that arises in a case the resolution of which is a logical basis for incurring liability under Article 315, No. 1 (b) of the Revised Penal Code.
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 —We must stress though, that an act violative of a trust receipt agreement is only one mode
jurisdiction to try and resolve the question must be lodged in another court or tribunal. It is a of committing estafa under the above-mentioned provision of the Revised Penal Code.
question based on a fact distinct and separate from the crime but so intimately connected Stated differently, a violation of a trust receipt arrangement is not the sole basis for incurring
with it that it determines the guilt or innocence of the accused, and for it to suspend the liability under Article 315 1(b) of the Code.
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.

Same; Same; Same; Requisites.

—For the court to appreciate the pendency of a prejudicial question, the law, in no
uncertain terms, requires the concurrence of two essential requisites, to wit: 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.
 50

SECOND DIVISION 2. Ordering defendant to pay rentals on the premises at the rate of five hundred
[G.R. No. 152021. May 17, 2005] (P500.00) pesos a month counted from January 1988 until possession thereof is
restored to the plaintiff;
HEIRS OF ERNESTO V. CONAHAP, namely, NERRE D. GANCINO-CONAHAP, FARRAH MAY
GANCINO CONAHAP, and MELANIE GANCINO CONAHAP,petitioners, vs. HEIRS OF
PROSPERADOR* REGAA, namely, MILAGROS REGAA and CARLA JOY 3. Ordering defendant to pay exemplary damages in the amount of TEN
REGAA, respondents. THOUSAND (P10,000.00) pesos;

4. Ordering defendant to pay attorneys fees in the amount of TEN THOUSAND

DECISION
(P10,000.00) Pesos plus appearance fees and other litigation expenses;
CALLEJO, SR., J.:
5. Ordering defendant to pay to (sic) [the] costs.
Sometime in August 1983, the spouses Prosperador and Milagros Regaa, who had first
returned to the Philippines from Nigeria, agreed to purchase a parcel of land in Davao City. PLAINTIFF further prays for such other reliefs as the Honorable Court may deem just and
The property, Lot No. 33, was located at Sapphire Street, Block No. 8 (Phase 4), Ecoland equitable in the premises.[7]
Subdivision, Matina, Davao City, and had an area of 331 square meters. It was owned by
Ecoland Properties Development Corporation (Ecoland), and the agreed price
In his answer to the complaint, Ernesto alleged that Prosperador had no cause of action
was P56,270.00, with a down payment of P3,000.00 upon the execution of the contract to
against him. He claimed that the subject property was part of a 188,299-square-meter lot
sell,[1] the balance payable on or before September 30, 1983. Project Engineer Romel
owned by Saya V.A. Lim and covered by TCT No. 2341; it was later sold to Ecoland on June 14,
Bernardino accompanied Prosperador Regaa to the property which was then unoccupied.
1974 via a deed of absolute sale,[8] and, thereafter, to the Regaa spouses. Ernesto further
Bernardino also showed a sketch plan[2] indicating its location; Bernardinos house was
alleged that the property occupied by him was a portion of the property subject of Ponciano
around 100 meters away from the lot;[3] adjacent thereto was the house owned by Delfin
Sabrosos existing application for a free patent with the Bureau of Lands. He presented
Yap,[4] and behind it, a commercial road.
Feliciano Sabroso, Poncianos brother, who declared that Ponciano had allowed Ernesto to
On August 22, 1983, Ecoland and Prosperador Regaa executed a Contract To Sell over the construct his house over the property.
property. The purchase price was paid, and the Register of Deeds thereafter issued Transfer
During the pre-trial, Ernesto admitted that the spouses Regaa had purchased the property
Certificate of Title (TCT) No. T-101822 under Prosperadors name. The Regaa spouses then
from Ecoland, and that it was titled in their names. For his part, Prosperador admitted that
left the Philippines and returned to Nigeria where they were employed.
the property was covered by Poncianos homestead patent application which was filed with
Upon their return to the Philippines in 1984, the couple visited the property and found it the Bureau of Lands in 1982.
unoccupied. They placed a temporary fence around its perimeter, as well as a No Trespassing
Feliciano testified further that there was no No Trespassing sign installed on the property,
sign.[5] They then left for Surigao where Milagros was then working. Upon their return to
nor any fence constructed around its perimeter.
Matina, Davao City in March 1988, they were dumbfounded to see that a house already
stood on their property that of Ernesto Conahap who, together with his family, was already Ernesto adduced evidence that Poncianos free patent application covered a 5-hectare lot,
residing therein.[6] Prosperador then filed a complaint for ejectment against Ernesto with the located in Kabacan, Matina, Davao City, and that such application was filed with the Bureau
Office of the Barangay Captain, Bucana, Davao City. The parties failed to arrive at a of Lands on August 25, 1982. Ernesto alleged in his application that he had occupied the
settlement. property since 1966 and planted coconut trees, fruit trees and vegetables.[9] Upon Poncianos
death on October 11, 1986, his brother Feliciano secured an authority from the Bureau of
Prosperador Regaa then filed a complaint for recovery of possession of the said property
Lands for the survey of the property on October 26, 1988.[10] The property was surveyed on
with the Regional Trial Court (RTC) of Davao City, praying that after due hearing, judgment be
October 28, 1988 and February 3, 1989 by Geodetic Engineer Meliton Panes who prepared a
rendered in his favor, viz.:
plan[11] covering the said lot. It appeared in the said plan that the property[12] claimed by the
Regaa spouses was owned by Ponciano. Per the Memorandum[13] of the Regional Technical
WHEREFORE, premises considered, it is most respectfully prayed of this Honorable Court that Director of the Land Management Services, dated July 31, 1991, a committee was created to
judgment be rendered: oversee the relocation survey of the exact boundaries of the Ecoland property.

1. Ordering defendant, his privies, agents, and representatives to vacate the land
in question, demolish his structure, and turn possession thereof to the plaintiff;
 51

Ernesto further alleged that although the Bureau of Lands had not approved Poncianos free In their comment to the petition, the respondents maintained that the decision of the CA
patent application, the property occupied by him was not a part of Ecolands property, as was correct. Subsequently, respondent Prosperador Regaa died and was survived by his
evidenced by the resurvey[14] of the property titled to the latter. heirs, respondents Milagros and Carla Joy Regaa.

Ernesto also adduced evidence that Ponciano had filed a complaint for forcible entry against The petition is denied due course.
Ecoland, and that Ecoland filed a similar complaint against him on August 15, 1984; after a
joint trial, the Municipal Circuit Trial Court of Davao City dismissed the cases in a The issues raised in this case are factual. Under Rule 45 of the Rules of Court, only questions
Decision,[15] dated June 19, 1989. The court ruled that it had no jurisdiction over the of law may be raised in this Court. The raison detre of this rule is that this Court is not a trier
complaint of Ecoland, and that Ponciano failed to prove his possession of the lot. Ponciano of facts. Unless for exceptional reasons, it is not to review the evidence on record and assess
appealed the decision to the RTC.[16] the probative weight thereof. Even in cases where the Court exercises its power to review,
the findings of fact of the CA are still to be considered conclusive and binding, unless in
On September 1, 1993, the trial court rendered judgment in favor of Prosperador. conflict with those of the trial court or contrary to the evidence on record.
The fallo of the decision reads:
The Court agrees with the contention of the petitioners that the RTC and the CA erred in
ruling that the respondents failed to prove that the property subject of Poncianos homestead
WHEREFORE, judgment is rendered against the defendant in favor of plaintiff: application in the Bureau of Lands includes the lot subject of the complaint. Nonetheless, the
fact is that, as gleaned from the pre-trial order of the trial court, Prosperador, as the plaintiff
1. Ordering the defendant, his privies, agents and representatives to vacate the (the respondents predecessor), admitted the following:
land in question, to demolish his structure and turn over possession thereof to
the plaintiff; 1) that the land is covered by the Application of Ponciano Sabroso but with the
counter-manifestation that said Application was not approved by the Bureau of Lands
2. Ordering defendant to pay plaintiff rentals of the land at the rate of P300.00 and it was filed nine (9) years ago and no action was taken thereon;
per month counted from Jan. 1988 until possession thereof is restored to the
plaintiff; 2) that there is a survey but with counter-manifestation that said survey was not
approved, Exhibit 1.[19]
3. Ordering defendant to pay attorneys fees in the amount of P10,000.00; and
On the other hand, Ernesto, the defendant therein and the predecessor of the petitioners,
4. To pay the cost.[17] admitted during the pre-trial that the property subject of the complaint was purchased by
Prosperador from Ecoland and was covered by TCT No. T-101822 under the name of
Ernesto appealed the decision to the Court of Appeals (CA), which affirmed the decision on Prosperador:
December 26, 2000. A motion for reconsideration thereof was likewise filed, and was
similarly denied. The appellate court ruled that Ernesto failed to prove that the property 1) the land is titled in the name of the plaintiff, Exhibit A;
occupied by him and his family was a portion of the property subject of Poncianos free
patent application. 2) the land was purchased from the Ecoland Development Corporation;
In the meantime, Ernesto died and was survived by his heirs, Nerre D. Gancino-
Conahap, Farrah May Gancino Conahap and Melanie Gancino Conahap, who now assail the 3) the matter of the area occupied by the defendant was reported by the plaintiff to
appellate courts decision and resolution through the instant petition for review on certiorari. the Office of the plaintiffs counsel for settlement and arbitration, Exhibit C
Certificate to File Action;
It is the contention of the petitioners that the decision of the CA does not comply with
Section 14, Article VIII of the Constitution. They further assert that under Article 434 of the
New Civil Code, Prosperador, as the plaintiff in the trial court, was burdened to prove the 4) the lot is now fully developed with concrete roads and underground drainage.[20]
identity of the property claimed by him, and that such property was covered by TCT No. T-
101822. Citing the ruling of this Court in Government of the Philippine Islands v. The admissions of the parties during the pre-trial as embodied in the pre-trial order of the
Franco,[18] and relying on their documentary evidence, the petitioners aver that Ponciano had court are binding and conclusive on them,[21] unless there is a clear showing that the
acquired title over the property by acquisitive prescription by virtue of his adverse possession admission was entered through palpable mistake.[22] Such admissions cannot be contradicted
even as against the owner, despite his erroneous belief that the property was public land. by the parties. The petitioners are thus estopped from claiming that the property occupied
 52

by them is not the property titled to the respondents, and that the latter failed to prove the
identity of the claimed property.

Since the property is titled to the respondents, they are entitled to possess the same. [23] It
bears stressing that a certificate of title serves as evidence of an indefeasible and
incontrovertible title to the property in favor of the person whose name appears therein.[24]

The ruling of this Court in Government of the Philippine Islands v. Franco[25] does not apply in
this case, since neither Ponciano nor his brother Feliciano was a party in the RTC. In that
case, the Director of Lands, in behalf of the government, filed a petition in the cadastral court
to settle and adjudicate the title to two parcels of land. Juan Franco claimed ownership over
the property and adduced proof during the trial that it was part of a forest concession
granted to Petronilo Sangued, but that he cultivated the property and built his house
thereon. Franco adduced proof that he complied with all the legal formalities for a
homestead patent application. The Court awarded the property to Franco who took
possession of the property on the erroneous belief that it was public land, with the intention
of holding and claiming it under the homestead law; he acquired title over the property by
actual possession as against the owner.

In this case, however, when Ponciano filed his application for a homestead patent over the
property in 1982, the property was already private land. Moreover, his application was not
acted upon, much less approved by the Bureau of Lands; hence, Ponciano never acquired any
rights over the property. By the time the complaint of the respondents was filed in the RTC,
Ponciano had already died.

IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of merit. Costs against the
petitioners.

SO ORDERED.
 53

EN BANC Maria testified that on the night of November 5, 1994, she was home with her father, herein
accused-appellant, and the latters ward, Gary Fraga. Accused-appellant and Gary Fraga slept
[G.R. Nos. 137297 & 138547-48. December 11, 2001] in the living room, while Maria slept in her room. Accused-appellants common-law wife,
Virginia Bangayciso, had gone to a dance party. At around 7 oclock in the evening, Maria
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. RICARDO AGRAVANTE y woke up to find accused-appellant on top of her. She tried to push him, but accused-
ZANTUA, accused-appellant. appellant proved too strong for her. She was slapped and then forced to have sexual
intercourse with accused-appellant. After he was through, accused-appellant left. Maria
lighted a lamp and went to the kitchen, where she washed off blood and a whitish substance
DECISION
from her private parts. She then returned to her bedroom and went to sleep. At around
MENDOZA, J.: midnight, however, accused-appellant was back and raped her again. She tried to resist him,
but he punched her on the thighs. The following day, Maria returned to her boarding
These cases are here on automatic appeal from the decision, [1] dated October 16, 1998, of house. She saw the owner, Adelina Racho, but did not tell her what had happened for fear of
the Regional Trial Court, Branch 40, Daet, Camarines Sur, finding accused-appellant Ricardo her father.
Agravante guilty of three counts of rape committed against his daughter Maria and On November 19, 1994, Maria came home for the weekend. Because she did not arrive until
sentencing him in each case to death and to pay the victim the sum of P50,000.00 as moral noon, she was scolded and given some lashes by accused-appellant. After lunch, her fathers
damages. common-law wife left to attend a birthday party in a place about a kilometer away from their
The facts are as follows: house. On the pretext that he wanted her to pick lice from his hair, accused-appellant
assaulted her when she came to him. Maria pleaded with him, reminding him, I am your
On November 26, 1994, the Provincial Prosecutor of Camarines Norte filed three daughter, why are you doing this to me?, but her pleas fell on deaf ears. Accused-appellant
informations for rape against accused-appellant in the RTC, Branch 40 of Daet, Camarines just the same raped her. After he was through, accused-appellant left and went to fetch his
Norte. Except for the allegations of the dates and times of the rapes, the informations in the common-law wife, leaving his daughter sobbing. He returned with his common-law wife at 4
three cases, docketed as Criminal Case Nos. 8430-32, were similarly worded. They alleged oclock in the afternoon.

Maria did not tell anyone about her misfortune until November 26, 1994, when she told
That on or about ___________________[2] at the Resettlement Area, Barangay Matacong, Susan Racho, the daughter of the owner of the boarding house, that she was not going home
San Lorenzo Ruiz, Camarines Norte, and within the jurisdiction of this Honorable Court, the that weekend because of what had happened to her. Susan told Marias story to her mother,
above-named accused, with lewd design and by means of force and intimidation, did, then Adelina Racho, who took Maria to Danny Manabat, a minister of the Iglesia ni Kristo
and there willfully, unlawfully, and feloniously commit sexual intercourse with one Maria (INK). Manabat and Enrico Amor, a police captain, in turn took them to the Philippine
Agravante y Vargas, a minor fourteen years of age, against the latters will, to her damage and National Police headquarters at Camp Wenceslao Q. Vinzons in Dogongan, Daet, Camarines,
prejudice. where she gave a sworn statement (Exh. A).[5] Maria was examined at the Camarines
Provincial Hospital.[6] The results of her examination (Exh. C) showed the following:
That the crime was committed with the aggravating circumstance of relationship, the
accused being the father of the offended party. GENITAL EXAMINATION:

CONTRARY TO LAW.[3] = Hymenal laceration[s] (old) 3:00, 6:00, 9:00 oclock

Thereafter, the cases were jointly tried. The prosecution presented as its witnesses the LABORATORY RESULT: Negative for sperm cells.[7]
complainant, Maria Agravante; Dr. Marcelito Abas, the medico-legal officer of the Camarines
Norte Provincial Hospital; and Adelina Racho.
According to the examining physician, Dr. Marcelito Abas, the three hymenal lacerations
Maria testified that she was born on August 27, 1980, the child of accused-appellant by his could have been caused by the forcible penetration of a turgid or erected penis. He explained
wife, Evelyn Vargas.[4] In 1994, she was a freshman at the Matacong (San Lorenzo Ruiz that the old lacerations were at least five to seven days old since lacerations heal after three
National) High School located seven kilometers from their house in Matacong, San Lorenzo days. As for the absence of sperm, Dr. Abas opined that the same might have been washed
Ruiz, Camarines Norte. Because of the distance of their house to the high school, Maria away during urination.[8]
stayed in a boarding house owned by Adelina Racho, going home only on Saturday mornings.
 54

Adelina Racho was the last prosecution witness to testify. She was a day care worker at the Agravantes the night of November 5, 1994, because, according to her, she took her son from
Department of Social Work and Development (DSWD) and Maria was a boarder in their them on October 25, 1994, after he had run away from home.[16]
house located near the high school where Maria was studying. According to Adelina Racho,
she was told that Maria did not want to go home on November 26, 1994, and that when she On October 16, 1998, the trial court rendered its decision, the dispositive portion of which
inquired about the reason, she was told it was because Maria had been raped by her father. reads:
Adelina Racho said she took Maria to the PNP at Camp Wenceslao Q. Vinzons, where they
gave their statements. She said it was Marias decision to have a medical examination at the IN THE CIRCUMSTANCES, the Court finds the accused Ricardo Agravante y Zantua guilty of
Provincial Hospital. Afterwards, Maria went to live with INK elder Danny Manabat until the the crime[s] charged beyond reasonable doubt and is hereby sentenced to suffer the penalty
DSWD in Sorsogon, Sorsogon took custody of her.[9] of death in each of the criminal cases No. 8430, 8431 and 8432 [sic].

The defense presented as witnesses Marias high school adviser, Rosalia Merca; the barangay
Accordingly, said accused is hereby condemned to pay Maria Agravante the sum
captain of Guinobatan, Bacud, Camarines Norte, Noel Gadil; accused-appellant; and the
of P50,000.00 in each of the three cases or a total sum of P150,000.00 as moral damages.
latters neighbor, Lilia Fraga Medollar.

Rosalia Merca affirmed her certification (Exh. 1),[10] dated November 28, 1994, that in 1994, IT IS SO ORDERED.[17]
Maria was absent from class six times in September, i.e., September 7, 8, 12, 13, 24, and 26,
four times in October, i.e., October 4, 5, 6, and 17, and eight times in November, i.e.,
On December 13, 1999, accused-appellant filed a motion for new trial on the ground of
November 2, 3, 4, 11, 16, 18, 25, and 28.[11]
newly discovered evidence based on an affidavit executed by his niece, Criselda Agravante,
Barangay Captain Noel Gadil affirmed the certification (Exh. 2)[12] he issued on January 8, on November 27, 1999. In her affidavit, Criselda stated that, like Maria, she was
1997 to the effect that there was no dance party held in his barangay on November 5, recruited into the INK and persuaded by Adelina Racho to work as a househelp because she
1994.[13] might just become the victim of incestuous rape which was the trend of the times; that she
stayed in Adelina Rachos house until her father Roberto came to take her; that in several
Testifying in his behalf, accused-appellant Ricardo Agravante stated that after he and Marias conversations, Maria told her how much she enjoyed her membership in the INK and how
mother, Evelyn Vargas, had separated in 1985, Maria remained in his custody. From February she hated her stepmother, who beat her, and her father, who did not protect her from being
to November 20, 1994, he worked as a laborer of the Philippine National Oil Company abused; and that she knew that Maria had been sleeping with her boyfriend Nio.
(PNOC) assigned to a job site in the municipality of San Lorenzo Ruiz. He and his common-law
wife, Virginia Bangayciso, and Maria lived in a resettlement area 50 kilometers In its resolution of January 25, 2000, this Court denied accused-appellants motion for new
away. Accused-appellant claimed that he stayed at the job site from Monday to Saturday and trial on the ground that the affidavit did not constitute newly discovered evidence. It was
went home only when shuttle service was available. For this reason, he seldom saw Maria, explained:
who came home from the boarding house only on weekends. Accused-appellant estimated
the boarding house to be eight kilometers from his house at barangay Matacong. Rule 121, 2 of the 1988 Rules on Criminal Procedure allows a new trial to be held on the
ground of newly discovered evidence on the following conditions: (a) the evidence was
Accused-appellant denied having raped his daughter. He claimed that she filed rape charges discovered after the trial, (b) it could not have been discovered and produced at the trial
against him because she was given lashes by him on November 19, 1994. He said he did this despite reasonable diligence, and (c) it is of such weight that, if admitted, would probably
only because she did not attend school and joined the Iglesia ni Kristo and seldom came change the judgment.
home. Accused-appellant claimed that after he had punished Maria, a friend fetched him and
his common-law wife to attend a neighbors party. Accused-appellant admitted that in the
evening of November 5 and 19, 1994, he slept in their house. He claimed, however, that In this case, the evidence supporting accused-appellants motion cannot be considered newly
Maria slept in a separate room which had a lock. He said he only came to know about the discovered. It had been in existence even before the trial, only that the witness, Criselda
charges against him in the evening of November 26, 1994 when the police took him for Agravante, who knew about the matter was not presented during the trial. In effect, it
questioning.[14] amounts to no more than forgotten proof which would not justify an order to conduct new
trial. (People v. Penesa, 81 Phil. 398 (1948)) Even if Criselda told accused-appellant what she
Lilia Fraga Medollar was a neighbor of the Agravantes. She corroborated accused-appellants knew only after he had been convicted, still it has not been shown that her testimony
claim that in the afternoon of November 19, 1994, she fetched accused-appellant and the constitutes evidence that could not have been unearthed without the exercise of reasonable
latters common-law wife and the three of them went to a birthday party of the child of a diligence. After all, Criselda is a niece of accused-appellant. Although she had moved to
neighbor, Pacita Catayon, staying there until 8 oclock in the evening. Lilia Fraga Medollar Pampanga, it appears that she and accused-appellant had maintained contact. By her own
belied Marias testimony that her (Lilias) son Gary Fraga[15] slept in the house of the admission, she was aware of the filing of the rape charges against accused-appellant. Yet it
 55

took her five years from learning of the charges against accused-appellant to signify her in the house of INK minister Danny Manabat and her refusal to give in to pressure from her
willingness to give evidence in his favor. relatives to desist.[21] Second, when Maria was asked by the public prosecutor:

Now, you were repeatedly asked by the counsel for the accused that if ever your father is
Finally, the Court does not think that her testimony is of such weight that it would probably found guilty by this Honorable Court in these three (3) cases, he might be meted out the
cause the acquittal of herein accused-appellant because the affidavit is merely of death penalty and you said you are aware of that. And you also said when asked by the
corroborative value and does not really concern facts constituting the crimes subject of these counsel for the accused that you also love your father. So, may I ask you, what is your motive
cases. (People v. Samaniego and Ong Inc., 95 Phil. 218 (1954)) It does not incontrovertibly in filing these cases against your father?,
show that accused-appellant did not commit the crimes with which he was charged.[18]
she answered: Because he raped me, sir.[22]
Accused-appellant then filed his brief in which he alleged that
No woman, much less one who is of tender age, would concoct a charge of sexual abuse and
1) The trial court grossly failed to consider facts and circumstances of the case endure the degradation and humiliation of a public trial, where she would be forced to reveal
indicating that private complainants charge of Rape and testimony are tainted by the lurid details of her misfortune, if she had not really been raped. This is particularly so
a semblance of being a malicious concoction. where, as in these cases, the accused is complainants own father for whom, it may be
2) The trial court erred in giving undue weight and credence to the testimony of assumed, every child has the deepest reverence and respect in our culture. [23]
private complainant despite the fact that her testimony indicates inconsistency,
lies, and improbabilities. B. Accused-appellant points out alleged improbabilities and inconsistencies in the testimony
of Maria, to wit:
3) The trial court erred when it engages in giving undue weight to the evidence
presented by the prosecution despite the existence of clear, positive and credible 1. It is contended that the fact that Maria went back to sleep after she had been raped on
evidence effectively controverting the evidence presented by the prosecution. November 5, 1994 as if nothing happened to her cannot be the reaction of one who had just
gone through a harrowing experience.
4) The trial court erred when it engages in wild conjectures and harped on
alleged weakness of appellants evidence to demolish the cause and the strong What accused-appellant perceives to be a cavalier reaction (going back to sleep as if nothing
and credible defense raised by the Accused. happened to her) appears more to be a desperate attempt on her part to deny what had
happened. This reaction is consistent with her other actions after the first rape, i.e., the
5) The trial court erred in not acquitting the accused-appellant on ground of washing of her private parts and changing her underwear. Indeed, there is no standard
reasonable doubt and for failing to appreciate facts indicating that the instant reaction of a victim to the crime of rape. Rape is both a physical and emotional assault
case is merely a malicious concoction perpetrated by the private complainant causing tremendous stress on the victim.[24] After her harrowing experience, Maria found
and her cohorts.[19] solace in sleep.
I. The sole issue presented by accused-appellant concerns the credibility of complainant 2. It is contended that Marias claim that accused-appellant whipped her on November 19,
Maria Agravante. 1994 because she came home late is improbable because accused-appellant was aware of
A. Accused-appellant contends that Maria Agravante simply concocted the rape charges the distance which Maria had to travel to reach home. According to accused-appellant, what
against him. He says that his daughter was bitter towards him because he gave her lashes is more probable is that he gave her some lashings because she had been absent from class
when he learned that she had been skipping classes in order to attend INK activities. Proof of many times attending INK activities.
this, he claims, is the fact that it was an INK member, Adelina Racho, who helped his But accused-appellant knew even before this incident of Marias absences because, as Marias
daughter lodge a complaint in the PNP. adviser testified, Marias stepmother saw her twice about Marias school attendance.[25] As for
We find the contention to be without merit. First of all, as pointed out by the Solicitor accused-appellants claimed opposition to Marias joining the INK, Maria testified that in fact
General, the members of the INK who helped Maria file charges against accused-appellant she had obtained his permission.[26]
are responsible members of the community: Adelina Racho is a day care worker of the Thus, it appears that accused-appellant chastised his daughter because the latter did not
DSWD, Danilo Manabat is an INK minister, while Enrico Amor is a police captain. If they come home the previous weekend (November 12-13, 1994).[27] Accused-appellant himself
helped Maria, it was because, as she said, she did not have any relative to help admitted this when he testified that one of the reasons he whipped Maria is that she seldom
her.[20] Indeed, the claim that Maria had been brainwashed into filing the charges is belied by came home.[28]
her steadfastness in seeking the prosecution of her father even after she was no longer living
 56

3. It is contended that Marias claim that she did not miss any class before the rape inadmissible in evidence.The fact that the lawyer of the accused, in his memorandum,
incidents[29] is belied by the certification (Exh. 1) issued by her adviser showing that Maria confirmed the Stipulation of Facts does not cure the defect because Rule 118 requires both
indeed incurred absences in September and October, 1994. the accused and his counsel to sign the Stipulation of Facts. What the prosecution should
have done, upon discovering that the accused did not sign the Stipulation of Facts, as
This inconsistency concerns only a minor collateral matter and does not detract from Marias required by Rule 118, was to submit evidence to establish the elements of the crime, instead
testimony that she had been raped by accused-appellant in November. For the same reason, of relying solely on the supposed admission of the accused in the Stipulation of Facts.
accused-appellants claim that the certification (Exh. 2) of Barangay Captain Noel Gadil that
there was no dance held on November 5, 1994 contradicts Marias testimony that accused- The stipulation of facts, therefore, cannot be used as evidence of complainants age at the
appellants common-law wife attended the said affair has little relevance to the rape time of the rapes in question.
charges. In any case, Gadil himself admitted that he issued the certification only on January
8, 1997, three years after the supposed event, not on the basis of any record kept by him or Nor is there sufficient evidence of complainants age. The testimonies of complainant
his office but only from memory.[30] concerning her age and that of her father, herein accused-appellant, concerning this matter
are insufficient. In People v. Tundag,[39] in which the complaints alleged that the victim was
4. According to accused-appellant, Marias testimony that Gary Fraga slept in their house on 13 years old at the time of the rapes, it was held that it was error for the trial court to take
November 5, 1994 is contradicted by the testimony of Lilia Fraga Medollar that earlier, on judicial notice of the victims age even if the defense admitted the victims minority. The Court
October 25, 1994, she took her son Gary from the Agravantes. emphasized that there must be independent proof, such as a birth certificate, of the age of
the victim. In People v. San Agustin,[40] this Court held that the latters minority had not been
However, Lilia Fraga Medollar herself testified that it took six months from the time her son sufficiently established notwithstanding the appellants admission that the victim was 13
Gary ran away sometime in October 1994 before she came to know his whereabouts and years of age. Judicial notice of the victims age may be taken if the victim is 10 years old or
subsequently took him from the Agravantes.[31] below,[41] but not where, as in this case, the victim is alleged to be 14 years old when she was
Thus, accused-appellant has not shown any compelling reason for this Court to depart from raped.
the trial courts finding that Maria was telling the truth when she accused accused-appellant As no independent evidence was presented by the prosecution to prove the minority of
of raping her. The inconsistencies and improbabilities in her testimony relate to minor, trivial, complainant, it was error for the trial court to find accused-appellant guilty of qualified rape
and inconsequential matters which do not alter the essential fact in the crime of rape, which and to sentence him to death.
is carnal knowledge through force or intimidation. [32] In fact, they may even be considered a
badge of truthfulness which erases any suspicion that Maria is a rehearsed witness.[33] On the However, the award of moral damages in the amount of P50,000.00 in each case must be
other hand, Marias claim that she had been raped is corroborated by the medical finding that sustained. There is no need to prove during trial that the victim suffered mental, physical,
she suffered hymenal lacerations at the 3, 6, and 9 o clock positions.[34] and psychological trauma as these are presumed. In addition, an award of P50,000.00 in civil
indemnity must also be made in each case in accordance with case law.[42] Because of the
II. Art. 335 of the Revised Penal Code, as amended by R.A. No. 7659, provides for the aggravating circumstance of relationship, an award of exemplary damages in the amount
imposition of the death penalty on the offender in rape cases if the victim is under eighteen of P25,000.00 should also be given.[43]
(18) years of age and the offender is, among others, a parent of the victim. As a qualifying
circumstance which increases the range of the penalty, the concurrence of the minority of WHEREFORE, the decision of the Regional Trial Court, Branch 49, Daet, Camarines Sur is
the victim and her relationship to the offender must be both alleged and proven.[35] MODIFIED by finding accused-appellant Ricardo Agravante y Zantua guilty of three counts of
simple rape and accordingly sentencing him in each case to suffer the penalty of reclusion
In these cases, while the informations allege that complainant was a minor fourteen years of perpetua and to pay complainant Maria Agravante P50,000.00 as civil indemnity
age at the time of the commission of the rapes and that accused-appellant is the father of and P25,000.00 as exemplary damages in addition to the amount of P50,000.00 awarded by
the offended party, only the relationship of accused-appellant to the complainant has been the trial court as moral damages.
sufficiently established.[36] To be sure, the minority of complainant (14 years of age at the
time of the commission of the rapes) was the subject of the parties stipulation of SO ORDERED.
facts.[37] However, the stipulation of facts was not signed by accused-appellant as required by
Rule 118, 2 of the Revised Rules of Criminal Procedure which provides that No agreement or
admission made or entered during the pre-trial conference shall be used in evidence against
the accused unless reduced to writing and signed by him and his counsel. This requirement is
mandatory. As held in Fule v. Court of Appeals: [38]

The conclusion is inevitable, therefore, that the omission of the signature of the accused and
his counsel, as mandatorily required by the Rules, renders the Stipulation of Facts
 57

THIRD DIVISION accused travelled alone on that fateful day of February 9, 1993. In addition, unlike the
[G.R. No. 139282. September 4, 2000] two other previous trips, which were uneventful, accused was waylaid by holduppers
along F.B. Harrison, about fifty (50) meters from the courthouse. The holduppers
ROMEO DIEGO y DE JOYA, petitioner, vs. The SANDIGANBAYAN and PEOPLE OF THE blocked the path of accuseds Beetle and two holduppers alighted from their vehicle, a
PHILIPPINES, respondents. dark blue box type Lancer with plate number PGM or PGN 44? One of the holduppers,
armed with a .45 caliber pistol, approached from the passenger side of the accuseds
DECISION vehicle and told the accused, Huwag kang papalag. Madidisgrasya ka lang. The
holdupper then asked for accuseds ignition keys and eyeglasses, opened the passenger
GONZAGA-REYES, J.: door of the vehicle, grabbed the bag containing the shabu placed at the vehicles front
passenger floor. The holduppers immediately left the scene of the crime and accused
Romeo Diego Y De Joya, herein petitioner, was convicted as principal in the crime of reported the incident to Judge Sayo of Branch 111 of the Regional Trial Court and to his
Malversation of Public Property by the Sandiganbayan in its Decision[1] dated February 22, office at the CIS, to Major Gil Meneses, in particular. The accused then testified in court
1999 in Criminal Case No. 21655. On July 7, 1999, the Sandiganbayan issued a Resolution before Judge Sayo regarding the loss of the shabu and immediately reported the
denying petitioners Motion for Reconsideration of the said decision. Hence, this appeal robbery to the Pasay City where he gave his statement (Exhibit 1) regarding the
by certiorari of the decision and resolution of the Sandiganbayan. incident on F.B. Harrison St. (sic)[2]
The criminal case against petitioner stems from these undisputed facts as summarized by the
Sandiganbayan, to wit: Petitioner was charged with Malversation of Public Property in an Information that reads:

Accused Romeo Diego started his career in the Philippine National Police as an Auto That on or about February 9, 1993, along F.B. Harrison St., Pasay City, Philippines, and
Mechanic way back in 1950. Through the years, he rose to the rank of Police within the jurisdiction of this Honorable Court, the above-named accused, a public
Superintendent (equivalent rank of Lt. Colonel). At the time of the loss of the shabu, officer being then the Evidence Custodian of the National Capital Regional Office -
the accused was the Evidence Custodian of the National Capital Region, Criminal PNPCIBC, and as such, by reason of his office and duties is responsible and accountable
Investigation Service Command at Camp Crame, Quezon City. On November 27, 1992, for public funds or properties entrusted or received by him, by means of gross
he received for safekeeping forty (40) self-sealed transparent plastic bags of negligence, did then and there wilfully (sic), unlawfully, and feloniously fail to take the
methamphetamine hydrochloride or shabu with an estimated street value of Five necessary precautions to adequately secure and safeguard the safe delivery of one (1)
Million Pesos (P5,000,000.00). As custodian of the said shabu, he received a total of small carton containing forty (40) self-sealed transparent plastic bags of shabu with
three (3) subpoenas from Branch 111, Regional Trial Court, Pasay City, to bring the said total gross weight of 5,900 grams, valued at FIVE MILLION (P5,000,000.00) PESOS,
shabu as evidence in Criminal Case No. 92-2097, entitled People vs. Ong Foo de la Philippine currency, to the Court, resulting to the loss of the said shabu, to the damage
Cruz. The first two subpoenas were for the hearings held on January 27, 1993 and and prejudice of the Government in the aforesaid amount.[3]
January 29, 1993 during which police escorts accompanied the accused to help secure
the subject evidence. On these two occasions, he was accompanied by three police On February 1, 1995, before the commencement of the trial, the prosecution and the
officers, namely: Crime Investigator II Zosimo Escobar, SPO3 Oscar Bacani and SPO3 defense entered into a Stipulation of Facts, agreeing to the following:
Isalvanor Casissid.Thus, the shabu was twice brought to the court but was not
presented in evidence since the hearings were postponed. In both instances, the 1. That at all times relevant to this case, accused Romeo de Joya Diego was then
accused also asked Presiding Judge Sayo whether he could turn over the evidence to evidence custodian of the National Capital Region (NCR), Criminal Investigation
the custody of the court. The latter, however, refused to accept the shabu for the Service Command (CISC), Philippine National Police (PNP), Camp Crame, Quezon
reason that the court did not have a vault to secure the same. In going to the Regional City.
Trial Court at Pasay City, the accused and his companions would leave Camp Crame at 2. That on November 27, 1992, accused Romeo de Joya Diego received for
about 7:30 a.m. and they would take EDSA to F.B. Harrison, which would lead them to safekeeping one (1) small cartoon (sic) containing forty (40) self-sealed plastic
the courthouse. bags of SHABU with a street value of Five Million Pesos (5,000,000.00) (sic).

By virtue of the third subpoena, the accused again left his office to go to the RTC at 3. That on February 9, 1993 he (accused Romeo de Joya Diego) was subpoenaed
Pasay City with the five-and-a-half kilos (5.5 kgs.) of shabu on February 9, 1993, again to appear and bring the subject SHABU to Branch 111, Regional Trial Court, Pasay
leaving at around 7:30 a.m. As usual, he took EDSA to F.B. Harrison towards the Pasay City.
City courthouse. Unlike the two previous trips to the said courthouse, however, the
 58

4. That at about 7:20 A.M. February 9, 1993, before he left for the Court he First - WHETHER OR NOT THE EVIDENCE ADDUCED BY THE PROSECUTION IN THE
sought the assistance of SPO 3 Isalvanor Casidsid to escort him. However, the PRACTICALLY REVERSE PROCEDURE OF PRESENTATION ADOPTED BY IT IS SUFFICIENT TO
latter was not available because he had also been subpoenaed to appear before PROVE THE ESSENTIAL ELEMENTS OF THE CRIME CHARGED IN THE INFORMATION;
Regional Trial Court (sic) Mariano Umali of Pasig.

5. That accused failed to deliver the subject SHABU before the Court on said date Second - WHETHER OR NOT, ASSUMING THAT THE BURDEN OF EVIDENCE WAS PROPERLY
(February 9, 1993) neither was it (the subject SHABU) returned to the evidence SHIFTED TO PETITIONER, THE EXPLANATION HE RELIED UPON FOR THE LOSS OF THE SUBJECT
room of the NCR, CISC, PAP, Camp Crame, Quezon City. SHABU IS SUFFICIENT TO EXONERATE HIM FROM LIABILITY FOR THE OFFENSE CHARGED;

6. That accused testified on said date (February 9, 1993) before the RTC, Branch Third - WHETHER OR NOT, ASSUMING WITHOUT ADMITTING, THAT PETITIONER IS GUILTY AS
111, Pasay City, Re lost (sic) of subject SHABU.[4] CHARGED, THE SUPPOSED ESTIMATED STREET VALUE OF THE SUBJECT SHABU IS A PROPER
BASIS FOR THE ASSESSMENT OF THE PENALTY IMPOSABLE IN THE PREMISES; and
Trial then ensued. On March 6, 1995, the prosecution manifested that it was not presenting
any testimonial evidence and rested its case upon orally offering its exhibits. After the
prosecution had rested its case, the prosecution and defense again agreed to a stipulation of Fourth - WHETHER OR NOT THE GUILT OF PETITIONER OF (sic) THE OFFENSE CHARGED HAS
facts, thus: BEEN PROVED BY EVIDENCE BEYOND REASONABLE DOUBT.[7]

1. That the accused Romeo Diego gave his statement marked as Exhibit 1 before
The petition has no merit.
SPO2 Rodolfo O. Diza on February 9, 1993, which consists of three (3) pages, 1-A
being the date of the statement and the signature being Exhibit 1-B; Petitioner contends that there was a virtual reversal of the normal order of presentation of
evidence during the trial when the Sandiganbayan required him, as accused, to put up his
2. That a Certification was issued by RTC Presiding Judge Sofronio G. Sayo on
defense when the prosecution rested its case relying only on its exhibits and the stipulation
January 27, 1995 in Criminal Case No. 92-2097 entitled People of the Philippine
of facts. However, the records of this case and the petition itself reveal that the trial in the
versus Eng. Foo de la Cruz, it being understood that the prosecution does not
Sandiganbayan proceeded in the order prescribed by Rule 119, Section 3 of the Rules of
admit the truth of the contents of the certification;
Court.[8] The prosecutions reliance on the stipulation of facts and its exhibits, without
3. The due genuineness and due execution of Exhibit 3, together with offering any testimonial evidence, is an exercise of its prosecutorial prerogative. If petitioner
submarkings, which is the transcript of stenographic notes taken in Criminal Case truly believed that the evidence of the prosecution was inherently weak such that it failed to
No. 92-2097, entitled People of the Philippines versus Eng. Foo de la Cruz, establish his culpability for the crime charged, then he should have filed a Demurrer to
consisting of forty-two pages.[5] Evidence to dismiss the case. However, instead of taking this course of action, petitioner
entered into another stipulation of facts and presented his evidence. Petitioner cannot now
After the defense had presented its witnesses and exhibits, the Sandiganbayan rendered its belatedly claim that the Sandiganbayan supposedly caused the onus probandi to shift to him,
judgment of conviction, the dispositive portion of which reads: the accused in a criminal case, when petitioner himself acquiesced to the regular order of the
proceedings.
WHEREFORE, the Court hereby renders judgment finding accused Superintendent Romeo
Petitioner bewails the prosecutions reliance on the stipulation of facts. It bears stress that
Diego y De Joya GUILTY beyond reasonable doubt as principal in the crime of Malversation of
the stipulation of facts is a judicial admission[9] and in the absence of a showing that (1) the
Public Property, as defined and penalized under paragraph 4 of Article 217 of the Revised
admission was made through palpable mistake, or that (2) no such admission was made, the
Penal Code; and considering the mitigating circumstance of voluntary surrender, hereby
admissions bind the declarant.[10]
sentences the accused to suffer an indeterminate penalty of imprisonment ranging from TEN
(10) YEARS and ONE (1) DAY of prision mayor, as minimum, to SEVENTEEN (17) YEARS, FOUR In this case, petitioner duly admitted in the stipulation of facts, entered into during the pre-
(4) MONTHS and ONE (1) DAY of reclusion temporal, as maximum; to pay a fine of FIVE trial, that the subject shabu worth five million pesos (P5,000,000.00) was in his custody for
MILLION PESOS (P5,000,000.00); to suffer the penalty of perpetual special disqualification safekeeping; that petitioner was subpoenaed to bring the shabu to Branch 111, Regional Trial
from holding any public office; and, to pay the costs.[6] Court, Pasay City Court; that petitioner failed to deliver the shabu before said court and that
neither was it returned to the evidence room.[11] The mere fact that petitioner failed to
Petitioner now assails the judgment in this appeal, relying on the following grounds: account for the shabu under his custody raises the rebuttable presumption that he
malversed the subject shabu. Article 217 of the Revised Penal Code states that:
 59

Art. 217. Malversation of public funds or property--Presumption of malversation. -- Any public 4. That he appropriated, took, misappropriated or consented or through
officer who, by reason of the duties of his office, is accountable for public funds or property, abandonment or negligence, permitted another person to take them. (Emphasis
shall appropriate the same, or shall take or misappropriate or shall consent, or through ours)[12]
abandonment or negligence, shall permit any other person to take such public funds or
property, wholly or partially, or shall otherwise be guilty of the misappropriation or Petitioner is a public officer who had custody of the shabu by reason of his official duties as
malversation of such funds or property, shall suffer: Evidence Custodian of the National Capital Regional Office of the Philippine National Police -
Criminal Investigation Service Command (NCRO, PNP-CISC). The shabu was public property
for which petitioner was accountable. While the evidence on record fail to show that
1. The penalty of prision correccional in its medium and maximum periods, if the petitioner misappropriated said public property for his personal aggrandizement, the
amount involved in the misappropriation or malversation does not exceed 200 evidence points to the conclusion that the loss of the shabu to armed men was through
pesos. petitioners negligence.
2. The penalty of prision mayor in its minimum and medium periods, if the Malversation is committed either intentionally or by negligence. [13] The Sandiganbayan in this
amount involved is more than 200 pesos but does not exceed 6,000 pesos. case ruled that the loss of the shabu was due to petitioners gross negligence, a factual finding
3. The penalty of prision mayor in its maximum period to reclusion temporal in its that is as a rule conclusive upon this Court.[14] In cases involving public officials, there is gross
minimum period, if the amount involved is more than 6,000 pesos but is less than negligence when a breach of duty is flagrant and palpable.[15] What makes petitioners gross
12,000 pesos. negligence more pronounced is the fact that he was fully aware of the need to transport the
shabu with police escorts but despite the knowledge of the peril involved in the
4. The penalty of reclusion temporal in its medium and maximum periods, if the transportation of illegal drugs, petitioner took it upon himself to deliver the subject shabu
amount involved is more than 12,000 pesos but is less than 22,000 pesos. If the without police escort, despite the fact that the shabu involved is valued at five million pesos
amount exceeds the latter, the penalty shall be reclusion temporal in its (P5,000,000.00), weighing 5.5 kilograms and packed in 40 sealed transparent plastic
maximum period to reclusion perpetua. bags. The sheer nature, value, and amount of the contraband should have alerted petitioner,
an experienced evidence custodian, to the risk that organized criminals might attempt to
In all cases, persons guilty of malversation shall also suffer the penalty of perpetual special forcibly take away the shabu. Petitioners diligence unmistakably fell short of that required by
disqualification and a fine equal to the amount of the funds malversed or equal to the total the circumstances.
value of the property embezzled.
We cite with approval the following findings of the Sandiganbayan:

The failure of a public officer to have duly forthcoming any public funds or property with
Indeed, the accused had miserably failed to exercise the necessary precautions to secure the
which his chargeable, upon demand by any duly authorized officer, shall be prima facie
safekeeping of the shabu under his care. There is no doubt that the accused was aware of the
evidence that he has put such missing funds or property to personal uses. (As amended by
dangers posed in transporting such a large amount of shabu subject of the instant case. As a
Rep. Act No. 1060).
matter of fact, he deemed it indispensable to secure, as he did, the assistance of three police
officers in the previous instances as escorts in transporting the shabu to and from the
The fundamental issue thus to be considered is whether or not petitioner was able to courthouse in Pasay City. His knowledge of such dangers was further revealed in his very own
successfully overturn the foregoing presumption. We hold that based on the testimony of testimony before the court, thus:
petitioner and the judicial admissions embodied in the stipulation of facts, the presumption
stands unrebutted.
J. Lagman:
All of the four elements of malversation are present in the case at bar, and these elements
Q: When you found that there was nobody to escort you, why did you not take steps to
are:
inform the Court that you could not come considering the volume of the shabu that you
1. That the offender is a public officer; will bring to the Court and considering the enormity of the case that you are supposed to
attend?
2. That he has the custody or control of funds or property by reason of the duties
of his office; A: My eagerness was to bring the evidence to the Court and turn it over to them because
that is dangerous.
3. That the funds or property are public funds or property for which he is
accountable; and
 60

Q: It was very dangerous for you to carry the shabu alone from your office to the Court as By all accounts, petitioner had previously undertaken certain measures to safeguard the
you said now, is that correct? In spite of that, you took it upon yourself to bring the shabu transportation of the shabu. In fact, during his first trip to the court he was accompanied by
alone considering the danger that you said was lurking outside? police escorts; he suggested that the shabu be deposited with the court, which the court
denied due to the absence of a vault; petitioner tried to look for a police escort on the day he
A: Yes, sir. was rescheduled to deliver the shabu in court, but allegedly to no avail; and he decided to
transport the shabu alone and incognito. Petitioners actions underscore the fact that he was
Undoubtedly, the danger posed of transporting the shabu was so real and apparent that the fully aware of the inherent danger in transporting the shabu, a fact that defeats his claim that
accused had previously tried to turn over the same to the custody of the Regional Trial Court the loss of the shabu to armed robbers was a fortuitous event.
in Pasay City in order that he be relieved of the burden of securing the same. His knowledge
of such danger, notwithstanding, the accused proceeded to Pasay City without the Concededly, the presence of police escorts would not have necessarily deterred the robbers
indispensable police escorts necessary to secure the shabu. He failed to take the necessary from taking the shabu, but in such a case, petitioner would have shown due diligence that
steps to procure police escorts when SPO3 Isalvanor Casidsid was unavailable. The fact that would controvert his own liability. True, petitioner is not expected to match a holdupper gun
he failed to organize the requisite police escorts on the day or days prior to the court date for gun. However, what is simply expected of him is to exhibit a standard of diligence
when he could have done so is already an indication of the accuseds laxity in the commensurate with the circumstances of time, person and place.
performance of his duties. Such laxity became even worse when he decided to proceed to The scale of the damage sustained by the government because of the loss of the shabu
Pasay City, bringing along with him the shabu, without police escorts. The alleged fact that he cannot be overemphasized. The estimated street value of the shabu is five million pesos
waited for thirty (30) minutes to look for an alternate escort, without taking any further (P5,000,000.00) and the circulation of this illegal substance in the market is a major setback
action, is insufficient to absolve accused from liability. Neither is the accuseds fear of being in the effort of government to curb drug addiction. We are thus in complete agreement with
cited for contempt sufficient justification for his irresponsible actions. He certainly could the Sandiganbayan that the unnecessary risks taken by petitioner in transporting the subject
explain to the judges satisfaction his failure to appear in court as required. shabu, leading to the eventual loss of this prohibited substance, cannot be countenanced.

In the case at bench, the accused could have pursued other options to ensure the security of Lastly, petitioner contends that the illegal nature of the shabu prevents the courts from
the shabu. The accused would have waited until alternative escorts arrived at the office. A basing the penalty on its value. We hold that the Sandiganbayan did not commit a grievous
simple telephone call to the office of Judge Sayo informing the latter that the accused would error when it imposed the penalty based on the value of the shabu. In malversation, the
be late would have sufficed. Under the circumstances, the judge would have understood the penalty for the offense is dependent on the value of the public funds, money or property
accuseds predicament and could have called the case at a later hour. Another option is not to malversed.[18]Generally, when the value is disputed, the court is proscribed from taking
have gone to the court if no escorts could be procured. Again, a telephone call to the office judicial notice of the value and must receive evidence of the disputed facts with notice to the
of the judge would again have probably sufficed to allay his fears of being cited for parties.[19] However, in the case at bar, the value of the shabu is not in dispute. Petitioner
contempt. Simply put, the accused failed to take all possible actions to ensure the security of subscribed to the stipulation of facts that the street value of the shabu is five million pesos
the shabu; he left too many stones unturned, so to speak. (P5,000,000.00). As stated earlier, statements embodied in the stipulation of facts are judicial
admissions and are thereby binding on the declarant. There is no indication that the
admission as to the value of the shabu was made through palpable mistake and petitioner
Furthermore, the court notes that the accused carried only a gun of a mere caliber
does not deny having made such an admission. Thus, the stipulated value of the shabu is not
.22. Indeed, if he were to truly secure his valuable cargo, as was his bounden duty, he should
an improper basis for the imposition of the penalty.[20]
have carried a more powerful firearm and maybe more than one such firearm, the need
therefor having become more compelling considering that he was to travel alone. It is a WHEREFORE, we AFFIRM the appealed decision of the Sandiganbayan convicting the accused
matter of common experience that holduppers normally carry high powered firearms.[16] Romeo Diego Y de Joya of Malversation of Public Property and imposing upon him the
indeterminate penalty of imprisonment ranging from ten (10) years and one (1) day of prision
In a last ditch effort to skirt the issue of gross negligence imputed against petitioner, mayor, as minimum, to seventeen (17) years, four (4) months and one (1) day of reclusion
petitioner claims that the robbery was a fortuitous event. This argument must likewise fail temporal, as maximum in view of the mitigating circumstance of voluntary surrender; to pay
since the loss of the shabu to armed men is by no means a fortuitous event. A fortuitous a fine of five million pesos (P5,000,000.00); and to suffer the penalty of perpetual special
event is defined as an occurrence which could not be foreseen or which though foreseen, is disqualification from holding any public office.
inevitable.[17]Again, the very nature of the object under the custody of petitioner and its
Costs against petitioner.
street value posed risks. One of these risks is that the shabu could be taken forcibly by armed
men, a risk that petitioner was in fact preparing against. The possibility of losing the shabu to SO ORDERED.
armed men was evidently a foreseeable event.
 61

FIRST DIVISION On February 25, 1982, the spouses Federico V. Carandang and Rosamyrna P. Carandang who
were the controlling stockholders of F.V. Carandang Construction, Inc. entered into a Land
[G.R. No. 85718. April 16, 1991.] Purchase Agreement with Royal Monarch Real Estate Corporation, by virtue of which the
former bought from the latter for P8,355,441.25 one hundred (100) residential lots in the
SPOUSES FEDERICO and ROSAMYRNA CARANDANG and F.V. CARANDANG, Petitioners, v. Greenfields Subdivision, Phases I and III, Sta. Monica and San Agustin, Novaliches, Quezon
THE HON. COURT OF APPEALS and PUZON INDUSTRIAL DEVELOPMENT City.
CORPORATION,Respondents.
On April 28, 1982 and May 7, 1982, F.V. Carandang Construction, Inc. contracted Puzon
Siruelo, Muyco & Associates Law Office, for Petitioners. Industrial Development Corporation to build, at its own cost, sixteen (16) housing units in the
said subdivision at an agreed contract price of P1,200 per square meter, with a provision that
Gil Venerando R. Racho for Private Respondent. Puzon would be paid for its construction work by assigning to it the sales collections from the
housing units constructed.

SYLLABUS On June 1, 1983, Puzon filed Civil Case No. Q-38378 against the Carandang spouses and F.V.
Carandang Construction, alleging that despite the completion of the sixteen (16) housing
units on August 24, 1982 at the cost of P971,050.17, the defendants had not paid Puzon the
1. REMEDIAL LAW; CIVIL PROCEDURE; SUMMARY JUDGMENT; CORRECTLY AND PROPERLY full amount of the contract price except P61,292.95, causing the plaintiff to suffer actual
RENDERED BY TRIAL COURT IN CASE AT BAR; REASON. — The summary judgment in Civil damages. The complaint was amended to include as party-defendant the Royal Monarch in
Case No. Q-38378 was proper. It was rendered entirely in accordance with the Rules of Court whose favor the Carandang spouses had executed on December 1, 1982, a General
and applicable jurisprudence as the pleadings and admissions on file showed that there Assignment of Collectible Accounts from its lot buyers, to be applied in payment of the
existed no genuine issue as to any material fact and that the movant was entitled to a Carandang’s indebtedness to Royal Monarch in the sum of P8,355,441.25.
judgment as a matter of law.
The amended complaint was further amended by impleading as additional party-defendant
2. ID.; PLEADINGS AND PRACTICE; PLEADINGS; FAILURE TO DENY GENUINENESS AND DUE the State Investment House Inc. (SIHI) with whom the Carandangs and Royal Monarch
EXECUTION OF ACTIONABLE DOCUMENTS TANTAMOUNT TO A JUDICIAL ADMISSION. — executed a Memorandum of Agreement dated April 29, 1983, whereby the Carandangs and
Defendant’s failure to deny the genuineness and due execution of the actionable documents Royal Monarch (which had defaulted in the payment of its loan obligations to SIHI), assigned
appended to the complaint was tantamount to a judicial admission by them of the to SIHI all their receivables from the sales of lots and houses in the Greenfields Subdivision,
genuineness and due execution of those documents. Phases I and III, including the 16 houses constructed by the plaintiff Puzon. It was further
alleged that another Memorandum Agreement dated October 15, 1983 was executed
3. ID.; EVIDENCE; JUDICIAL ADMISSIONS; DO NOT REQUIRE PROOF AND MAY NOT BE between SIHI and F.V. Carandang Construction, whereby the former became the sole and
CONTRADICTED; EXCEPTION. — Judicial admissions do not require proof and may not be absolute owner of several parcels of land and the improvements thereon, including the
contradicted in the absence of a prior showing that the admissions had been made through houses built by the plaintiff Puzon; that the memoranda of agreement in favor of State
palpable mistake. Investment were executed without the plaintiff’s knowledge and in derogation of the
previous undertaking of the Carandangs and F.V. Carandang Construction to apply the
proceeds of the sales of said houses to the payment of the plaintiffs credit; that SIHI received
DECISION the sales proceeds and receivables from the housing project and nothing was left for the
plaintiff; that under the law, the plaintiffs claim constitutes an encumbrance on the
improvements it constructed and shall be considered as a mortgage thereon.chanrobles
GRIÑO-AQUINO, J.: virtual lawlibrary

The Carandangs and F.V. Carandang Construction, Inc. alleged that the houses built by the
This petition seeks a review of the Court of Appeals’ decision dated August 31, 1988 in CA- plaintiff were defective, that plaintiff’s claim of P909,757.22 was not yet due and
G.R. CV No. 08052 entitled, "Puzon Industrial Development Corporation v. Spouses Federico demandable because the sales of the housing units were cancelled or withdrawn by the
and Rosamyrna Carandang, Et Al.," holding the Carandang spouses and F.V. Carandang buyers; that Royal Monarch collected the sales proceeds and receivables from the housing
Construction, Inc. jointly and severally liable to Puzon Industrial Development Corporation. units sold by the Carandangs, hence, Puzon’s cause of action should be against Royal
Monarch alone.
 62

"c. P20,000.00 attorney’s fee,

Royal Monarch, in its answer, alleged that it had nothing to do with the construction contract
between Puzon and the Carandangs and that it has absolute and exclusive right to receive "d. and costs of this suit;
and collect the proceeds of the sales from the lots purchased from it by the Carandangs and
the houses constructed thereon. "2. Defendants Carandangs and defendant State Investment House Inc. to pay jointly and
severally, plaintiff the sum of P92,418.59 representing 40% of the P231,046.49 already
On the other hand, SIHI alleged that in 1982, F.V. Carandang Construction availed of a loan collected and received by State Investment House Inc. from the sales of the 11 units;
accomodation from SIHI pursuant to its representation that it would use the loan for the
construction of housing units and assign to SIHI all receivables from the sale of said housing "3. Defendant State Investment House Inc. to share and pay to plaintiff 40% on all receivables
units; that SIHI was made to believe that the housing units were free from liens and from the 11 units and of the remaining 5 houses that may be sold hereafter;
encumbrances and that F.V. Carandang Construction had absolute title to the houses; that
when the obligation matured, a Memorandum of Agreement was executed between "4. No pronouncement is made against/for defendant Royal Monarch Real Estate Corp." (pp.
Carandang Construction and SIHI whereby F.V. Carandang Construction delivered and 18-19, Rollo.).
transferred the housing units to SIHI; and that SIHI had no knowledge of the transaction
between Puzon and F.V. Carandang Construction. The Carandangs, Carandang Construction and SIHI appealed the decision to the Court of
Appeals in CA-G.R. CV No. 08052 entitled, "Puzon Industrial Development Corporation,
After submission of the pre-trial briefs and responses in compliance with the court’s order plaintiff-appellee v. Spouses Carandang Construction, Royal Monarch Real Estate
dated September 7, 1984, the parties agreed to limit the issues to the following:chanrob1es Corporation, Defendants, and State Investment House, Inc., Defendant-Appellant."cralaw
virtual 1aw library virtua1aw library

1. how much deductions defendants Carandang are claiming from Puzon’s total construction On August 31, 1988, the Court of Appeals promulgated a decision finding the appeal of the
investment of P984,326.50 in the 16 housing units; and Carandang spouses devoid of merit, but it absolved SIHI from any liability to Puzon. It
ordered the Carandang spouses and F.V. Construction, Inc. to pay jointly and severally to the
2. whether Puzon is entitled to share in the amortizations received by SIHI from all the plaintiff-appellee the following amounts:jgc:chanrobles.com.ph
interests assigned by Carandang in its favor.
"1. P923,034.07 as the principal obligation of said defendants to the plaintiff;
On January 24, 1986, Puzon filed a motion for summary judgment with supporting
documentary evidence and a sworn statement of interest due and damages (pp. 386-388, "2. P345,783.87 as actual damages;
Records). The motion for summary judgment was set for hearing on February 7, 1986, and
copies were served on all the defendants on January 25, 1986. None of them opposed the "3. P50,000.00 as exemplary damages;
motion nor appeared at the hearing (p. 89, Records).
"4. P20,000.00 as attorney’s fee; and
On February 26, 1986, the trial court rendered a summary judgment, the dispositive portion
of which reads:jgc:chanrobles.com.ph "5. Costs of the suit." (p. 33, Rollo.)

"WHEREFORE, premises above considered, judgment is hereby rendered in favor of plaintiff, The petitioners filed a motion for reconsideration of the decision which the Court of Appeals
hereby ordering — denied in a Resolution dated November 15, 1988. Hence, this petition for Review under Rule
45 of the Rules of Court.
"1. Defendants Carandangs to pay, jointly and severally, the plaintiff the following amounts,
to wit:jgc:chanrobles.com.ph The petitioners argue that their assignment to SIHI of their collectible accounts was part of
SIHI’s conditions for granting them a loan, and not their scheme to defraud Puzon; that the
"a. P65,662.83 by way of remittance, the Carandangs have collected and received from the assignment did not include residential units constructed by Puzon and therefore, no fraud
sales of the 11 housing units (pursuant to defendant’s compliance, p. 358 of records), tainted the assignment made by Carandang to SIHI, that the issue of fraud is a vital issue,
hence, the case should not have been decided by summary judgment. They submitted the
"b. P345,783.87 for actual damages, following "questions of law" for review by this Court:chanrob1es virtual 1aw library
 63

1. whether the appellate court and the trial court could legally and validly decide Civil Case
No. Q-38378 (CA-G.R. CV No. 08052) by summary judgment;

2. whether the appellate court and the trial court could legally award damages in a summary
judgment proceedings on the basis of mere allegations in the pleadings; and

3. whether the appellate court and the trial court could legally hold Carandang liable to
plaintiff under Job Orders Nos. 3 and 4 (p. 6, Petition).

There is no merit in the petition. The "legal questions" raised by the petitioners are sham for,
in reality, they present factual issues.

The summary judgment in Civil Case No. Q-38378 was proper. It was rendered entirely in
accordance with the Rules of Court and applicable jurisprudence as the pleadings and
admissions on file showed that there existed no genuine issue as to any material fact and
that the movant was entitled to a judgment as a matter of law (Sec. 3, Rule 34, Rules of
Court).

The petitioners’ allegation that they were deprived of their day in court and that they were
not given an opportunity to comment or oppose the motion for summary judgment is not
correct for the parties were served copies of the motion; it was set for hearing on February 7,
1986, no opposition was filed, and none of the defendants appeared at the hearing to
oppose it. Defendants’ failure to deny the genuineness and due execution of the actionable
documents appended to the complaint was tantamount to a judicial admission by them of
the genuineness and due execution of those documents (Sec. 8, Rule 8, Rules of Court).
Judicial admissions do not require proof and may not be contradicted in the absence of a
prior showing that the admissions had been made through palpable mistake (Bell Carpets
International Trading Corporation v. CA, G.R. No. 75315, May 7, 1990; Pan Realty Corporation
v. CA and Tan Export Corporation, 167 SCRA 564; Puertollano v. IAC, 156 SCRA
188).chanrobles law library : red

The appellate court found plaintiff’s causes of action (for damages and for specific
performance of Carandang’s obligations under Job Orders Nos. 3 and 4) to have duly
established by the pleadings and other papers on record, hence, a summary judgment for the
plaintiff was correctly and properly rendered by the trial court (Bunag v. CA, 158 SCRA 299;
Vallarta v. CA, 151 SCRA 680).

WHEREFORE, the petition for review is dismissed for lack of merit. Costs against the
petitioners.

SO ORDERED.
 64

SECOND DIVISION The case was thereafter punctuated by various incidents relative to modes of discovery, pre-
trial, postponements or continuances, motions to dismiss, motions to declare defendants in
G.R. No. 149576 August 8, 2006 default and other procedural matters.

REPUBLIC OF THE PHILIPPINES, represented by the Land Registration Authority, Petitioner, During the pendency of the case, the Senate Blue Ribbon Committee and Committee on
vs. Justice and Human Rights conducted a hearing in aid of legislation on the matter of land
KENRICK DEVELOPMENT CORPORATION, Respondent. registration and titling. In particular, the legislative investigation looked into the issuance of
fake titles and focused on how respondent was able to acquire TCT Nos. 135604, 135605 and
135606.
DECISION

During the congressional hearing held on November 26, 1998, one of those summoned was
CORONA, J.:
Atty. Garlitos, respondent’s former counsel. He testified that he prepared respondent’s
answer and transmitted an unsigned draft to respondent’s president, Mr. Victor Ong. The
The Republic of the Philippines assails the May 31, 2001 decision 1 and August 20, 2001 signature appearing above his name was not his. He authorized no one to sign in his behalf
resolution of the Court of Appeals in CA-G.R. SP No. 52948 in this petition for review under either. And he did not know who finally signed it.
Rule 45 of the Rules of Court.
With Atty. Garlitos’ revelation, the Republic promptly filed an urgent motion on December 3,
This case stemmed from the construction by respondent Kenrick Development Corporation 1998 to declare respondent in default, 2 predicated on its failure to file a valid answer. The
of a concrete perimeter fence around some parcels of land located behind the Civil Aviation Republic argued that, since the person who signed the answer was neither authorized by
Training Center of the Air Transportation Office (ATO) in 1996. As a result, the ATO was Atty. Garlitos nor even known to him, the answer was effectively an unsigned pleading.
dispossessed of some 30,228 square meters of prime land. Respondent justified its action Pursuant to Section 3, Rule 7 of the Rules of Court, 3 it was a mere scrap of paper and
with a claim of ownership over the property. It presented Transfer Certificate of Title (TCT) produced no legal effect.
Nos. 135604, 135605 and 135606 issued in its name and which allegedly originated from TCT
No. 17508 registered in the name of one Alfonso Concepcion.
On February 19, 1999, the trial court issued a resolution granting the Republic’s motion. 4 It
found respondent’s answer to be sham and false and intended to defeat the purpose of the
ATO verified the authenticity of respondent’s titles with the Land Registration Authority rules. The trial court ordered the answer stricken from the records, declared respondent in
(LRA). On May 17, 1996, Atty. Jose Loriega, head of the Land Title Verification Task Force of default and allowed the Republic to present its evidence ex parte.
the LRA, submitted his report. The Registrar of Deeds of Pasay City had no record of TCT No.
17508 and its ascendant title, TCT No. 5450. The land allegedly covered by respondent’s titles
The Republic presented its evidence ex parte, after which it rested its case and formally
was also found to be within Villamor Air Base (headquarters of the Philippine Air Force) in
offered its evidence.
Pasay City.

Meanwhile, respondent sought reconsideration of the February 19, 1999 resolution but the
By virtue of the report, the Office of the Solicitor General (OSG), on September 3, 1996, filed
trial court denied it.
a complaint for revocation, annulment and cancellation of certificates of title in behalf of the
Republic of the Philippines (as represented by the LRA) against respondent and Alfonso
Concepcion. It was raffled to Branch 114 of the Regional Trial Court of Pasay City where it Aggrieved, respondent elevated the matter to the Court of Appeals via a petition for
was docketed as Civil Case No. 96-1144. certiorari 5 seeking to set aside the February 19, 1999 resolution of the trial court.
Respondent contended that the trial court erred in declaring it in default for failure to file a
valid and timely answer.
On December 5, 1996, respondent filed its answer which was purportedly signed by Atty.
Onofre Garlitos, Jr. as counsel for respondent.
On May 31, 2001, the Court of Appeals rendered the assailed decision. It found Atty. Garlitos’
statements in the legislative hearing to be unreliable since they were not subjected to cross-
Since Alfonso Concepcion could not be located and served with summons, the trial court
examination. The appellate court also scrutinized Atty. Garlitos’ acts after the filing of the
ordered the issuance of an alias summons by publication against him on February 19, 1997.
answer 6 and concluded that he assented to the signing of the answer by somebody in his
stead. This supposedly cured whatever defect the answer may have had. Hence, the
 65

appellate court granted respondent’s petition for certiorari. It directed the lifting of the order was similar to addressing an authorization letter "to whom it may concern" such that any
of default against respondent and ordered the trial court to proceed to trial with dispatch. person could act on it even if he or she was not known beforehand.
The Republic moved for reconsideration but it was denied. Thus, this petition.
3. Atty. Garlitos testified that he prepared the answer; he never disowned its contents and he
Did the Court of Appeals err in reversing the trial court’s order which declared respondent in resumed acting as counsel for respondent subsequent to its filing. These circumstances show
default for its failure to file a valid answer? Yes, it did. that Atty. Garlitos conformed to or ratified the signing of the answer by another.

A party may, by his words or conduct, voluntarily adopt or ratify another’s Respondent repeated these statements of Atty. Garlitos in its motion for reconsideration of
statement. 7 Where it appears that a party clearly and unambiguously assented to or the trial court’s February 19, 1999 resolution. And again in the petition it filed in the Court of
adopted the statements of another, evidence of those statements is admissible against Appeals as well as in the comment15 and memorandum it submitted to this Court.
him. 8 This is the essence of the principle of adoptive admission.
Evidently, respondent completely adopted Atty. Garlitos’ statements as its own.
An adoptive admission is a party’s reaction to a statement or action by another person when Respondent’s adoptive admission constituted a judicial admission which was conclusive on it.
it is reasonable to treat the party’s reaction as an admission of something stated or implied
by the other person. 9 By adoptive admission, a third person’s statement becomes the Contrary to respondent’s position, a signed pleading is one that is signed either by the party
admission of the party embracing or espousing it. Adoptive admission may occur when a himself or his counsel. Section 3, Rule 7 is clear on this matter. It requires that a pleading
party: must be signed by the party or counsel representing him.

(a) expressly agrees to or concurs in an oral statement made by another; 10 Therefore, only the signature of either the party himself or his counsel operates to validly
convert a pleading from one that is unsigned to one that is signed.
(b) hears a statement and later on essentially repeats it; 11
Counsel’s authority and duty to sign a pleading are personal to him. He may not delegate it to
(c) utters an acceptance or builds upon the assertion of another; 12 just any person.

(d) replies by way of rebuttal to some specific points raised by another but ignores further The signature of counsel constitutes an assurance by him that he has read the pleading; that,
points which he or she has heard the other make 13 or to the best of his knowledge, information and belief, there is a good ground to support it;
and that it is not interposed for delay. 16Under the Rules of Court, it is counsel alone, by
(e) reads and signs a written statement made by another. 14 affixing his signature, who can certify to these matters.

Here, respondent accepted the pronouncements of Atty. Garlitos and built its case on them. The preparation and signing of a pleading constitute legal work involving practice of law
At no instance did it ever deny or contradict its former counsel’s statements. It went to great which is reserved exclusively for the members of the legal profession. Counsel may delegate
lengths to explain Atty. Garlitos’ testimony as well as its implications, as follows: the signing of a pleading to another lawyer 17 but cannot do so

1. While Atty. Garlitos denied signing the answer, the fact was that the answer was signed. in favor of one who is not. The Code of Professional Responsibility provides:
Hence, the pleading could not be considered invalid for being an unsigned pleading. The fact
that the person who signed it was neither known to Atty. Garlitos nor specifically authorized Rule 9.01 ― A lawyer shall not delegate to any unqualified person the performance of any
by him was immaterial. The important thing was that the answer bore a signature. task which by law may only be performed by a member of the Bar in good standing.

2. While the Rules of Court requires that a pleading must be signed by the party or his Moreover, a signature by agents of a lawyer amounts to signing by unqualified
counsel, it does not prohibit a counsel from giving a general authority for any person to sign persons, 18 something the law strongly proscribes.
the answer for him which was what Atty. Garlitos did. The person who actually signed the
pleading was of no moment as long as counsel knew that it would be signed by another. This
 66

Therefore, the blanket authority respondent claims Atty. Garlitos entrusted to just anyone ASIDE and the February 19, 1999 resolution of the Regional Trial Court of Pasay City, Branch
was void. Any act taken pursuant to that authority was likewise void. There was no way it 114 declaring respondent in default is herebyREINSTATED.
could have been cured or ratified by Atty. Garlitos’ subsequent acts.
Let a copy of this decision be furnished the Commission on Bar Discipline of the Integrated
Moreover, the transcript of the November 26, 1998 Senate hearing shows that Atty. Garlitos Bar of the Philippines for the commencement of disbarment proceedings against Atty.
consented to the signing of the answer by another "as long as it conformed to his draft." We Onofre Garlitos, Jr. for his possible unprofessional conduct not befitting his position as an
give no value whatsoever to such self-serving statement. officer of the court.

No doubt, Atty. Garlitos could not have validly given blanket authority for just anyone to sign SO ORDERED.
the answer. The trial court correctly ruled that respondent’s answer was invalid and of no
legal effect as it was an unsigned pleading. Respondent was properly declared in default and Facts:
the Republic was rightly allowed to present evidence ex parte.
-Kenrick Development Corp built a perimeter wall which encroached upon some parcels of
Respondent insists on the liberal application of the rules. It maintains that even if it were true land occupied by ATO based on TCTs derived from TCT No. 17508 registered in the name of
that its answer was supposedly an unsigned pleading, the defect was a mere technicality that one Alfonso Concepcion. When ATO verified the TCTs with the Land Registration Authority
could be set aside.
(LRA), it was found that there were no record of TCT no. 17508 and its ascendant title. Land
was also covered by Villamor Air Base.
Procedural requirements which have often been disparagingly labeled as mere technicalities
have their own validraison d’ etre in the orderly administration of justice. To summarily brush
-so OSG, on behalf of LRA, filed a COMPLAINT FOR REVOCATION, ANNULMENT AND
them aside may result in arbitrariness and injustice. 19
CANCELLATION OF CERTIFICATES OF TITLE in behalf of RP vs. Kenrick and Alfonso Concepcion

The Court’s pronouncement in Garbo v. Court of Appeals 20 is relevant: -Alfonso Concepcion cannot be found so alias summon by publication done

Procedural rules are [tools] designed to facilitate the adjudication of cases. Courts and -Kenrick allegedly filed an answer signed by Atty. Onofre Garlitos, Jr as their counsel (but
litigants alike are thus [enjoined] to abide strictly by the rules. And while the Court, in some later on, during a Senate hearing, it was found that somebody else signed for Atty. Garlitos
instances, allows a relaxation in the application of the rules, this, we stress, was never
but he did not authorize such signing)
intended to forge a bastion for erring litigants to violate the rules with impunity. The
liberality in the interpretation and application of the rules applies only in proper cases and
-case punctuated by various incidents relative to modes of discovery, pre-trial,
under justifiable causes and circumstances. While it is true that litigation is not a game of
technicalities, it is equally true that every case must be prosecuted in accordance with the postponements or continuances, MTDs, Motion to declare defendant in default, et al.
prescribed procedure to insure an orderly and speedy administration of justice.
-Pending hearing, Senate conducted hearing in aid of legislation on the issuances of fake
Like all rules, procedural rules should be followed except only when, for the most persuasive titles and focused on how Kenrick was able to obtain title to lands wherein it built perimeter
of reasons, they may be relaxed to relieve a litigant of an injustice not commensurate with fence. Here is where atty. Garlitos denied that he signed the answer before the RTC
the degree of his thoughtlessness in not complying with the prescribed procedure. 21 In this
case, respondent failed to show any persuasive reason why it should be exempted from -with that admission before the senate, OSG filed Urgent motion to declare Kenrick in
strictly abiding by the rules. default. - answer no signature of counsel so mere scrap of paper

As a final note, the Court cannot close its eyes to the acts committed by Atty. Garlitos in -RTC: granted, declared defendant in default, allowed RP to present evidence ex parte
violation of the ethics of the legal profession. Thus, he should be made to account for his
possible misconduct. -MR: Denied, so petition for certiorari

WHEREFORE, the petition is hereby GRANTED. The May 31, 2001 decision and August 20, -CA: reversed RTC
2001 resolution of the Court of Appeals in CA-G.R. SP No. 52948 are REVERSED and SET
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statements of Atty. Garlitos in the Senate hearing unreliable, not subject to cross Like all rules, procedural rules should be followed except only when, for the most persuasive
examination of reasons, they may be relaxed to relieve a litigant of an injustice not commensurate with
the degree of his thoughtlessness in not complying with the prescribed procedure. 21 In this
Acts of Atty Garlitos after the filing of the answer: although he did not sign it, he prepared case, respondent failed to show any persuasive reason why it should be exempted from
the draft of the answer and even if it was signed by another person, he did not contest it and strictly abiding by the rules.
even represented Kenrick in another case - these acts supposedly cured whatever defect the
answer had As a final note, the Court cannot close its eyes to the acts committed by Atty. Garlitos in
violation of the ethics of the legal profession. Thus, he should be made to account for his
ISSUE: WON CA erred ? YES. Kenrick is really in default, for their answer was not signed possible misconduct.
therefore the said pleading is deemed as a mere scrap of paper and thus they are not
considered to have submitted any answer at all.

On the alleged blanket authority given by Atty. Garlitos for anyone to sign the draft answer
he prepared

-acts of Kenrick was deemed to have adopted the statements of Atty. Garlitos (that the
answer submitted was not signed by him therefore, they have submitted a defective answer)
- adoptive admission

-SIGNED PLEADING: signed by the counsel or the party himself; counsel's signature cannot be
delegated and means that he certifies that he has read the pleading; that, to the best of his
knowledge, information and belief, there is a good ground to support it; and that it is not
interposed for delay. Under the Rules of Court, it is counsel alone, by affixing his signature,
who can certify to these matters.

On liberal interpretation of rules (rules are mere technicalities….)

Procedural requirements which have often been disparagingly labeled as mere technicalities
have their own valid raison d’ etre in the orderly administration of justice. To summarily
brush them aside may result in arbitrariness and injustice. 19

The Court’s pronouncement in Garbo v. Court of Appeals 20 is relevant:

Procedural rules are [tools] designed to facilitate the adjudication of cases. Courts and
litigants alike are thus [enjoined] to abide strictly by the rules. And while the Court, in some
instances, allows a relaxation in the application of the rules, this, we stress, was never
intended to forge a bastion for erring litigants to violate the rules with impunity. The
liberality in the interpretation and application of the rules applies only in proper cases and
under justifiable causes and circumstances. While it is true that litigation is not a game of
technicalities, it is equally true that every case must be prosecuted in accordance with the
prescribed procedure to insure an orderly and speedy administration of justice.
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SECOND DIVISION On December 14, 1999, the trial court11 set the hearing on respondent’s application for
issuance of a TRO on December 15, 1999.12 At the scheduled hearing, petitioners asked to be
G.R. No. 151001 September 8, 2006 represented by the Office of the Solicitor General. The trial court consequently reset the
hearing to December 27, 1999.
DR. MELANIO MALICDEM and ROY C. FERRER*, petitioners,
vs. On December 20, 1999, Dr. Rodolfo Asanion, as PSU’s representative, filed an
ROMEO FLORES,** respondent. answer13 alleging that the lease in question "was an unauthorized contract for it was never
approved by the President of the PSU." Furthermore, petitioners never assured respondent
that the lease contract would be renewed. In fact, as early as June 9, 1995, the university had
DECISION
advised respondent that the lease contract would be terminated effective at the start of the
school year 1995 to 1996.14
CORONA, J.:
This move was meant to comply with the Commission on Audit’s recommendation to nullify
On August 3, 1993, Dr. Apolinario G. Bautista, the former dean of Pangasinan State University the contract of lease for being defective. Not only was there no public bidding, the six-year
(PSU),1 entered into a "contract of agreement"2 with respondent Romeo Flores and a certain term also violated the two-year limit allowed by Sections 53115 and 53316 of the General
Francisco Lotivio. In the contract, Dr. Bautista, as PSU’s representative, allowed them to lease Accounting and Auditing Manual (GAAM).17 Dr. Asanion also averred that the complaint did
the canteen building and general merchandise store for a monthly rental of P1,200. The not state a cause of action because "a contract of lease (was) a consensual contract and the
contract also obligated them to "shoulder in advance the cost of the required court (had) no authority to force the (petitioners) to enter into one."
repair/renovation of the said building."3 The P1,200 rent was to be deducted from the cost of
the repair/renovation until the amount they spent therefor was paid. The term of the
On December 27, 1999, petitioners requested another postponement of the hearing on the
contract was six years (September
issuance of the TRO.

16, 1993 to September 15, 1999) "subject to extension by agreement of the

On January 21, 2000, respondent filed a "motion for issuance of TRO and/or writ of
parties."4 Respondent and Lotivio thereafter repaired/renovated the premises and started
preliminary injunction,"18asserting that despite the advice of the trial court to maintain the
operating the canteen.
status quo, petitioners started the construction of a new canteen near the disputed
premises.
In 1995, Lotivio withdrew from his partnership with respondent.
On the same date, petitioners filed a "motion to dismiss (with opposition to the prayer for
Before the expiration of the contract, respondent was allegedly assured by PSU 5 that the issuance of a TRO and preliminary injunction)."19 They maintained that respondent had no
contract would be renewed for another six years to enable him to recover the expenses he cause of action against them "as they (were) not legally bound to renew the contract of
had incurred for the repair/renovation and operations of the canteen. On September 12, lease." Petitioners also stated that they had no intention of renewing the contract because
1999, respondent formally informed the new dean, petitioner Dr. Melanio Malicdem, of his respondent allegedly violated several provisions of the lease, namely: (a) failing to pay
intention to renew the lease contract.6 On October 27, 1999, respondent received a letter rentals amounting to P3,510; (b) failing to settle water and electric bills; (c) using the canteen
from Dr. Malicdem notifying him that the contract was not going to be renewed and that PSU as dwelling place and (d) making improvements without PSU’s prior approval.20
President Dr. Rodolfo Asanion had extended the term of the contract to October 31, 1999
only.7 In his reply-letter,8 respondent reiterated his request to renew the lease contract for
In his "comment and/or opposition21" to the motion to dismiss, respondent maintained that
another six years. On November 17, 1999, respondent was informed that PSU’s decision not
he repaired/renovated the premises because of the assurances made to him that the lease
to renew the lease was final.9
contract would be renewed. He further asserted that the civil case was not only for specific
performance but also for damages.
Because of these developments, respondent instituted an action for specific performance
and damages, with prayer for a temporary restraining order (TRO) and/or preliminary
On February 23, 2000, the court a quo issued an order, the pertinent part of which read:
injunction against PSU, represented by university officials Dr. Rodolfo Asanion, President; Dr.
Melanio D. Malicdem, College Dean and Roy C. Ferrer, Special Director for Administrative
Services.10 It was docketed as Civil Case No. SCC-2308. After a careful examination of the divergent stances of the contending parties, this
court deems it best to hear the above-cited issues raised by both the plaintiff and
 69

the defendants. Besides, this motion was filed after the filing of the answer of the case was finally decided on the merits.30 This being so, the general rule applied: the denial of
defendants, hence, it should be denied in consonance with Section 1, Rule 16 of a motion to dismiss cannot be questioned in a certiorari proceeding under Rule 65 of the
the Rules of Court. Rules of Court as it is a remedy designed to correct errors of jurisdiction and not errors of
judgment.31
WHEREFORE, premises considered, instant Motion to Dismiss is hereby denied for
lack of merit. However, in a few instances,32 we allowed the denial of the motion to dismiss to be the
subject of a certiorari proceeding. The parties filing it, however, clearly showed that the trial
SO ORDERED.22 court committed grave abuse of discretion in denying the motion. Not so in this case,
however, as no grave abuse of discretion was demonstrated to have been committed by the
trial
Petitioners moved for reconsideration23 but the same was denied on April 5, 2000.24

court in denying petitioners’ motion to dismiss. The Court of Appeals therefore did not err in
Aggrieved, petitioners filed a special civil action for certiorari25 in the Court of Appeals. They
upholding the assailed order of the trial court.
contended that the trial court acted without or in excess of jurisdiction or with grave abuse
of discretion when it denied the motion to dismiss the complaint.
First, the motion to dismiss was clearly dismissible because petitioners had already filed an
answer before they filed the motion to dismiss. Section 1, Rule 16 of the Rules of Court
The appellate court dismissed the petition26 and likewise denied petitioners’ motion for
provides that the motion to dismiss must be filed "within the time for but before filing the
reconsideration.27
answer to the complaint or pleading asserting a claim." The records undeniably show that
petitioners, through Dr. Asanion, filed an answer dated December 20, 1999, a month before
Hence, this petition for review on certiorari28 on the grounds that: they filed the motion to dismiss on January 21, 2000.33 The answer filed by Dr. Asanion as
PSU’s representative was binding on petitioners because they were not sued in their
I. personal capacities but as PSU officials.

THE COURT OF APPEALS GRAVELY ERRED WHEN IT RULED THAT [THE TRIAL COURT] Second, petitioners’ contention that the trial court failed to state its reasons for denying the
STATED SUFFICIENT BASIS IN [ITS] ORDER DATED FEBRUARY 23, 2000 WHICH motion is not correct. The trial court’s order denying the motion to dismiss complied fully
DENIED PETITIONERS’ MOTION TO DISMISS IN CIVIL CASE NO. SCC-2308. with Section 3, Rule 16.34 It narrated the conflicting claims of the parties and concluded that
their divergent positions were best threshed out in a full-blown hearing.
II.
It also denied the motion to dismiss on the basis of Section 1, Rule 16 for having been filed
THE COURT OF APPEALS GRAVELY ERRED WHEN IT AFFIRMED [THE TRIAL COURT’S] after the filing of an answer. This was sufficient to deny the said motion. The trial court
ORDER DENYING PETITIONERS’ MOTION TO DISMISS IN CIVIL CASE NO. SCC-2308. followed the right procedure because, after the issues were joined by the filing of the
answer, trial should have ensued.

III.
Besides, the requirement of specificity of rulings under Section 14, Article VIII35 of the
Constitution and Section 1, Rule 3636 is stringently applied only to judgments and final
THE COURT OF APPEALS GRAVELY ERRED WHEN IT RULED THAT [RESPONDENT] orders. A liberal interpretation of this requirement, on the other hand, may be given to
HAS SUFFICIENTLY STATED A CAUSE OF ACTION AGAINST PETITIONERS. 29 interlocutory orders.37

There is no merit in the petition. Lastly, contrary to petitioners’ contention that respondent failed to state a cause of action,
suffice it to say that the allegations in the complaint constituted, at the very least, a cause of
The special civil action for certiorari filed by petitioners with the Court of Appeals was not the action for damages.
proper remedy to assail the denial by the trial court of the motion to dismiss. The order of
the trial court denying the motion to dismiss was merely interlocutory. It neither terminated Section 1, Rule 8 of the Rules of Court provides that the complaint needs only to allege the
nor finally disposed of the case as it still left something to be done by the court before the ultimate facts upon which plaintiff (respondent herein) bases his claim.
 70

The rules of procedure require that the complaint must make a concise statement laches. As these matters require presentation and/or determination of facts, they
of the ultimate facts or the essential facts constituting the plaintiff’s cause of can be best resolved after trial on the merits.
action. A fact is essential if it cannot be stricken out without leaving the statement
of the cause of action inadequate. A complaint states a cause of action only when it Private respondents cannot be denied their day in court. While, in the resolution of
has its three indispensable elements, namely: (1) a right in favor of the plaintiff by a motion to dismiss, the truth of the facts alleged in the complaint are theoretically
whatever means and under whatever law it arises or is created; (2) an obligation on admitted, such admission is merely hypothetical and only for the purpose of
the part of the named defendant to respect or not to violate such right; and (3) an resolving the motion. In case of denial, the movant is not to be deprived of the
act or omission on the part of such defendant violate of the right of plaintiff or right to submit its own case and to submit evidence to rebut the allegation in the
constituting a breach of the obligation of defendant to the plaintiff for which the complaint. Neither will the grant of the motion by a trial court and the ultimate
latter may maintain an action for recovery of damages.38 reversal thereof by an appellate court have the effect of stifling such right. So too,
the trial court should be given the opportunity to evaluate the evidence, apply
It might have been true that PSU was under no legal compulsion to renew the contract with the law and decree the proper remedy. Hence, we remand the instant case to the
respondent. It might have also been true that there was a violation of Sections 531 and 533 trial court to allow private respondents to have their day in court. (emphasis ours)
of the GAAM due to the absence of public bidding and violation of the two-year limit on a
revenue-generating contract. However, nothing is more settled than the rule that, in a Everything considered, reason dictates that the parties should proceed with the trial to
motion to dismiss for failure to state a cause of action, the focus is on the sufficiency, not the determine their respective rights and obligations.
veracity, of the material allegations. Moreover, the determination is confined to the four
corners of the complaint39 and nowhere else.
WHEREFORE, the petition is hereby DENIED. The assailed decision and resolution of the
Court of Appeals areAFFIRMED.
In a motion to dismiss a complaint based on lack of cause of action, the question
submitted to the court for determination is the sufficiency of the allegations made
Costs against petitioners.
in the complaint to constitute a cause of action and not whether those allegations
of fact are true, for said motion must hypothetically admit the truth of the facts
alleged in the complaint. SO ORDERED.

The test of the sufficiency of the facts alleged in the complaint is whether or not,
admitting the facts alleged, the court could render a valid judgment upon the same
in accordance with the prayer of the complaint.

If the allegations of the complaint are sufficient in form and substance but their
veracity and correctness are assailed, it is incumbent upon the court to deny the
motion to dismiss and require the defendant to answer and go to trial to prove
his defense. The veracity of the assertions of the parties can be ascertained at the
trial of the case on the merits.40 (emphasis ours)

Furthermore, the issue of whether or not respondent in fact secured PSU’s prior approval
before he undertook the said repair/renovation was, among other things, a matter best
threshed out in a full-blown trial. In short, all this should be resolved in a hearing on the
merits of Civil Case No. SCC-2308 where both parties can present their respective evidence.

In Parañaque Kings Enterprises, Inc. v. Court of Appeals,41 we held that:

We find no more need to pass upon the question of whether the complaint states a
cause of action for damages or whether the complaint is barred by estoppel or